Exhibits mesoderm-dorsalizing activity and neural-inducing activity, but lacks mesoderm-inducing activity. Regulates the expression of specific mesodermal and neural genes. Induces convergent extension movements at the embryonic midline by activating the fgf signaling pathway to induce t/bra expression in the organizer region. Acts with wnt11 to induce Spemann organizer cells and induce axis formation. The unprocessed protein antagonizes bmp-signaling. Monomer (By similarity). The propeptide region interacts with bmp4 in a non-covalent manner. Expressed in the epithelial layer of the Spemann organizer during gastrulation. Expression increases from late blastula (stage 9) through gastrulation, ending by the time of blastopore closure (stage 13). By Li(+), siamois and wnt signaling, including wnt8 and lef1. Induction by wnt8 is inhibited by vegt. Not induced by vegt or activin. The propeptide region is both necessary and sufficient for bmp-inhibitory activity (By similarity). The propeptide region and the N- and C-terminal thirds of the mature protein are necessary for neural induction activity. Although cleavage doesn't appear essential for activity, residues surrounding the cleavage site are necessary for activity. Belongs to the TGF-beta family.