Transcriptional repressor. Acts in a ventral signaling pathway downstream of bmp4, which suppresses dorsal mesoderm formation and leads to both ventral mesoderm and ventral ectoderm formation. Acts in the ectoderm to simultaneously specify epidermal lineages and restrict neuralization. Represses transcription of dorsal-specific genes. Binds to DNA, with preference for the target sequences 5'-TAATGC-3' and 5'-TAATTG-3'. Acts in a pathway downstream of bmp4 and fgf to negatively regulate erythroid specification. Expressed in the ventral marginal zone of blastulae. At early gastrulation, expression begins to spread to the animal pole (ectoderm), and at stage 11.5 is expressed in a gradient across the animal cap, with levels highest in the ventral region. At the end of gastrulation, predominantly localized to the ventral and lateral regions of the closing slit blastopore. Also expressed at a low level in ventral endoderm. Expression begins in the late blastula, peaks at stage 11 (early gastrula) and decreases thereafter. By bmp4 and its downstream effector smad1. Fgf enhances bmp4-induced expression. The repressor activity is mostly localized to the C-terminal region.