Islet-1 is a LIM domain transcription factor involved in several processes of embryonic development. Xenopus Islet-1 (Xisl-1) has been shown to be crucial for proper heart development. Here we show that Xisl-1 and Xisl-2 are differentially expressed in the nervous system in Xenopus embryos. Knock-down of Xisl-1 by specific morpholino leads to severe developmental defects, including eye and heart failure. Staining with the neuronal markers N-tubulin and Xisl-1 itself reveals that the motor neurons and a group of ventral interneurons are lost in the Xisl-1 morphants. Terminal dUTP nick-end labeling (TUNEL) analysis shows that Xisl-1 morpholino injection induces extensive apoptosis in the ventral neural plate, which can be largely inhibited by the apoptosis inhibitor M50054. We also find that over-expression of Xisl-1 is able to promote cell proliferation and induce Xstat3 expression in the injected side, suggesting a potential role for Xisl-1 in the regulation of cell proliferation in co-operation with the Jak-Stat pathway.