XTcf-3 is a maternally expressed Xenopus homolog of the mammalian HMG
box factors Tcf-1 and Lef-1 The N-terminus of XTcf-3 binds to beta-cat
enin. Microinjection of XTcf-3 mRNA in embryos results in nuclear tran
slocation of beta-catenin. The beta-catenin-XTcf-3 complex activates t
ranscription in a transient reporter gene assay, while XTcf-3 by itsel
f is silent. N-terminal deletion of XTcf-3 (Delta N) abrogates the int
eraction with beta-catenin, as well as the consequent transcription ac
tivation. This dominant-negative Delta N mutant suppresses the inducti
on of axis duplication by microinjected Delta-catenin. It also suppres
ses endogenous axis specification upon injection into the dorsal blast
omeres of a 4-cell-stage embryo. We propose that signaling by beta-cat
enin involves complex formation with XTcf-3, followed by nuclear trans
location and activation of specific XTcf-3 target genes.