In zebrafish, the organizer is thought to consist of two regions, the yolk
syncytial layer (YSL) and the shield. The dorsal YSL appears to send signal
s that affect formation of the shield in the overlying mesendoderm. We show
here that a domain of dorsal deep cells located between the YSL and the sh
ield is marked by expression of the iro3 gene. As gastrulation proceeds, th
e iro3 positive domain involutes and migrates to the animal pole. Iro3 expr
ession is regulated by Nodal and bone morphogenic protein antagonists. Over
expression of iro3 induced ectopic expression of shield-specific genes. Thi
s effect was mimicked by an Iro3-Engrailed transcriptional repressor domain
fusion, whereas an Iro3-VP16 activator domain fusion behaved as a dominant
negative or antimorphic form. These results suggest that Iro3 acts as a tr
anscriptional repressor and further implicate the iro3 gene in regulating o
rganizer formation. We propose that the iro3-expressing dorsal deep cells r
epresent a distinct organizer domain that receives signals from the YSL and
in turn sends signals to the forming shield, thereby influencing its expan
sion and differentiation.