The vertebrate liver, pancreas and lung arise in close proximity from the multipotent foregut endoderm. Tissue-explant experiments uncovered instructive signals emanating from the neighbouring lateral plate mesoderm, directing the endoderm towards specific organ fates. This suggested that an intricate network of signals is required to control the specification and differentiation of each organ. Here, we show that sequential functions of Wnt2bb and Wnt2 control liver specification and proliferation in zebrafish. Their combined specific activities are essential for liver specification, as their loss of function causes liver agenesis. Conversely, excess wnt2bb or wnt2 induces ectopic liver tissue at the expense of pancreatic and anterior intestinal tissues, revealing the competence of intestinal endoderm to respond to hepatogenic signals. Epistasis experiments revealed that the receptor frizzled homolog 5 (fzd5) mediates part of the broader hepatic competence of the alimentary canal. fzd5 is required for early liver formation and interacts genetically with wnt2 as well as wnt2bb. In addition, lack of both ligands causes agenesis of the swim bladder, the structural homolog of the mammalian lung. Thus, tightly regulated spatiotemporal expression of wnt2bb, wnt2 and fzd5 is central to coordinating early liver, pancreas and swim bladder development from a multipotent foregut endoderm.