Transcriptional activator. Recognizes and binds to the DNA sequence 5'-TGT[GT][GT]ATT-3'. Upon TGF-beta induction, forms a transcriptionally active complex with smad2 and smad4 called activin-responsive factor 1 (ARF1), which binds a site on the mix-B/mix.2 promoter called the activin response element (ARE). Binds to activated smads and the ARE with much lower affinity than fast3. Necessary for the first steps in mesoderm specification, directly inducing mesodermal genes. Acts with fast3 to control the convergent extension movements of gastrulation. Binds to the proximal element (PE) of the gsc gene and cooperates with gtf2ird1/wbscr11 and SMAD proteins to regulate gsc transcription. ARF1 contains 2 smad2s, 1 smad4 and 1 foxh1/fast-1 protein. Interaction with smad4 is most likely indirect through interaction with the MH2 domain of smad2. Binds to the MH2 domain of smad3, which can incorporate into the ARF1 complex. The ARF1 and ARF2 complexes are activated by distinct TGF-beta family members; formation of ARF1 is promoted by activin. Interacts (via Fork-head domain) with gtf2ird1/wbscr11 (via repeats 4-5). Highly expressed in the animal cap (prospective ectoderm) and prospective mesoderm of stage 10.25 embryos. Expressed both maternally and zygotically. Present in oocytes and in early embryos until shortly after gastrulation, after which levels decline and remain low through tadpole development. The FM region is required for binding smad2/smad4 complexes. FM2 is more effective than FM1 and only interacts with phosphorylated smad2 that is in an activated smad complex.