Involved in ventralization. May mediate Bmp2b signaling during early phases of embryonic dorsal-ventral pattern formation. Required for initiation of Smad1 expression during gastrulation. May form trimers with the co-SMAD SMAD4. In the cytoplasm in the absence of ligand. Migration to the nucleus when complexed with SMAD4 (By similarity). Expressed both maternally and zygotically. Uniform distribution at the cleavage, blastula, gastrula and early somitogenesis stages. Levels decline during the early gastrula stages. At 26 hours, still expressed in the head, forming gut and dorsal neural tube. Belongs to the dwarfin/SMAD family.