Transcriptional repressor involved in developmental processes (By similarity). Binds to the palindromic T site 5'-TTCACACCTAGGTGTGAA-3' DNA sequence, or a half-site, which are present in the regulatory region of several genes (By similarity). Probably plays a role in limb pattern formation (By similarity). Required for mammary placode induction, and maintenance of the mammary buds during development (PubMed:16222716). Involved in branching morphogenesis in both developing lungs and adult mammary glands, via negative modulation of target genes; acting redundantly with TBX2 (PubMed:27720610, PubMed:16222716). Required, together with TBX2, to maintain cell proliferation in the embryonic lung mesenchyme; perhaps acting downstream of SHH, BMP and TGFbeta signaling (PubMed:27720610). Involved in modulating early inner ear development, acting independently of, and also redundantly with, TBX2 in different subregions of the developing ear (PubMed:33795231). Acts as a negative regulator of PML function in cellular senescence (By similarity). Interacts with PML. In adults, highest levels in lung. Also found in brain, heart, kidney, liver and ovary. At 9.5 dpc, expressed in the otic vesicle, also known as the otocyst (at protein level) (PubMed:33795231). Between 10.5-12.0 dpc, expressed in various regions of the developing ear, including the developing vestibular system and the epithelium of the cochlear duct (at protein level) (PubMed:33795231). Expressed in the blastocyst at 3.5 dpc (PubMed:8853987). At 7.5 dpc, expressed in the extraembryonic endoderm and in the mesoderm of the chorion and amnion (PubMed:8853987). At 9.5 dpc, in the facial region, forelimb, pharyngeal epithelium, mesenchyme of the pharyngeal arches and the lateral body wall and, at 12.5 dpc, in the trigeminal ganglia, developing central nervous system and in the mammary buds (PubMed:8853987). Expressed in a continuous stripe of mesenchyme in the ventro-lateral body wall between the fore and hind limb buds at day 10.5-11.5 dpc (PubMed:16222716). Also expressed in the epithelium of the first and third mammary placodes at 10.5 dpc, and in all five pairs of mammary placodes between 11.5 and 13.5 dpc (PubMed:16222716). Conditional knockdown targeted mainly to lung mesenchyme causes lung hypoplasia at 18.5 dpc (PubMed:27720610). Conditional knockdown targeted mainly to the otic epithelium disrupts inner ear morphogenesis, which is exacerbated by simultaneous conditional knockdown of TBX2 (PubMed:33795231). Simultaneous conditional knockdown of TBX2 and TBX3 targeted mainly to lung mesenchyme causes severe bleeding from 10.5 dpc and embryos die shortly thereafter, perhaps as a result of knockdown in the developing heart (PubMed:27720610).