Liver is the largest internal organ of the human body. It performs a multitude of functions. Therefore, it is provided with a huge regenerative capacity however, because of the same reason it is also prone to various diseases. Hence, it is essential to understand liver development in order to understand liver regeneration and liver diseases to provide better therapeutic targets and solutions. Liver development is orchestrated by a variety of intrinsic and extrinsic factors. The major focus of this dissertation thesis is to elucidate the role of BMP signals and YY1/VEGFA regulated signals in liver development. Liver organogenesis initiates with induction of the naïve endoderm. Although, BMPs regulate the expression of some liver specific genes including albumin, a-fetoprotein and transthyretin, wide gaps exist in our understanding of regulation of liver morphogenesis and liver induction by BMP in the context of a whole embryo. Using small molecule inhibitors and electroporation based strategies in mouse whole embryo culture, we show that BMP signals are required mainly for the induction (HNF4α expression) of the posterior (septum trasnversum mesenchyme lined) liver bud. BMP patterns the hepato-pancreatobiliary boundary by indirectly repressing SOX9 expression in the hepatic domain. Furthermore, BMP and FGF are required by spatially complementary subsets of hepatoblasts to pattern the whole liver bud. In order to gain a deeper understanding of the mechanism by which BMP signals play an indirect role in hepatic induction, we propose to use the abundantly available yolk sac visceral endoderm (VE) as a proxy for the liver bud since mechanistic investigation of early liver development is challenged by the scarcity and inaccessibility of the liver tissue at these stages. We use a YY1 mutant mouse where deletion of YY1 in the VE or the hepatic endoderm yields similar phenotypes including VEGFA reduction, loss of mesodermal angiogenesis and loss of endodermal HNF4α expression. Since the phenotype is rescued by the addition of exogenous VEGF, endodermal HNF4α expression is regulated by VEGF-controlled paracrine signals from the mesoderm. We perform a transcriptomic analysis of the yolk sac tissues at the requisite experimental conditions to find the identity of these signals.