Essential for Wnt/beta-catenin-mediated formation of the Spemann organizer and for induction of the organizer precursor, the Nieuwkoop center. Acts as a transcriptional activator, cooperating with TGFbeta signals to induce a program of organizer-specific gene expression and to generate an organizer with both head- and trunk-inducing activity. Activates the head organizer gene cer1 by acting synergistically with otx2 and mix-A/mix.1 through the 5'-TAATCT-3' element of the cer1 promoter. Also binds as a complex with lhx1/lim1 and mix-A/mix.1 to the 3x 5'-TAAT-3' element of the cer1 promoter. Required for subsequent dorsoventral axis formation in the embryo, dorsalizing ventral mesoderm and cooperating with t/bra to induce dorsal mesoderm. Also involved in neural induction, inducing the cement gland and neural tissue in overlying ectoderm. Later in development, has the second function of indirectly repressing ventral genes, probably by activating the expression of a transcriptional repressor (By similarity).