Acts as a positive cofactor of GATA transcription factors to establish the identity of the ventral mesoderm during gastrulation. Down-regulation in the dorsal mesoderm is necessary for the proper formation of this territory since, when present, lmo4 may bind ldb1 and restrict the availability of this cofactor for Spemman organizer transcription factors. At neurula stages, suppresses primary neuron differentiation and modulates gene expression at the Isthmic Organizer of the midbrain-hindbrain boundary. At the start of gastrulation (stage 10), expressed in the mesodermal marginal zone. Shortly after (stage 11), expression is down-regulated in the dorsal most region. During neurulation, expressed in the neural plate and ventral epidermis. At late neurula stages, also expressed more rostrally, and then in the brain, migrating neural crests and ventral epidermis. Expressed both maternally and zygotically. By irx1 in the neural plate. By bmp4-signaling in the ventral mesoderm. Down-regulated in the dorsal mesoderm at stage 11 by Spemann Organizer repressors including gsc.