Transcriptional activator. Upon TGF-beta induction, forms a transcriptionally active complex with smad2 and smad4 called activin-responsive factor 2 (ARF2), 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 higher affinity than foxh1/fast-1. Acts with foxh1/fast-1 to control the convergent extension movements of gastrulation. ARF2 contains 2 smad2s, 1 smad4 and 1 fast3 protein. Interacts with the MH2 domain of smad2. The ARF1 and ARF2 complexes are activated by distinct TGFbeta family members; formation of ARF2 is promoted by derriere and vegt. Highly expressed in the animal cap (prospective ectoderm) and prospective mesoderm of stage 10.25 embryos. Expressed only during gastrulation. 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.