Transcriptional activator. Activates an activin response element (ARE). Recognizes and binds to the DNA sequence 5'-TGT[GT][GT]ATT-3'. Modulator of nodal signaling required for organizer formation. Also required for the development of dorsal axial structures and left-right symmetry. Expressed both maternally and zygotically. Localized to the prospective animal pole during oogenesis. Ubiquitous expression during the blastula stages. During early gastrulation, levels are higher ventrally and in the presumptive shield (organizer region). Later in gastrulation, expression is restricted to midline and ventral cells. At the start of somatogenesis, expression is restricted to notochord, lateral plate mesoderm and a stripe of anterior dorsal neuroectoderm. By the 19-somite stage, expression in the lateral plate and midline diminishes but forebrain expression persists. All expression is lost by 24 hours post-fertilization (hpf). 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 (By similarity). Fishes exhibit ventral body curvature, reduced spacing of the eyes, and absence or reduction of ventral neuroectoderm, including the floor plate.