This study analyzes the expression and the function of Xenopus msx-1 (Xmsx-1) in embryos, in relation to the ventralizing activity of bone morphogenetic protein-4 (BMP-4). Expression of Xmsx-1 was increased in UV-treated ventralized embryos and decreased in LiCl-treated dorsalized embryos at the neurula stage (stage 14). Whole-mount in situ hybridization analysis showed that Xmsx-1 is expressed in marginal zone and animal pole areas, laterally and ventrally, but not dorsally, at mid-gastrula (stage 11) and late-gastrula (stage 13) stages. Injection of BMP-4 RNA, but not activin RNA, induced Xmsx-1 expression in the dorsal marginal zone at the early gastrula stage (stage 10+), and introduction of a dominant negative form of BMP-4 receptor RNA suppressed Xmsx-1 expression in animal cap and ventral marginal zone explants at stage 14. Thus, Xmsx-1 is a target gene specifically regulated by BMP-4 signaling. Embryos injected with Xmsx-1 RNA in dorsal blastomeres at the 4-cell stage exhibited a ventralized phenotype, with microcephaly and swollen abdomen. Histological observation and immunostaining revealed that these embryos had a large block of muscle tissue in the dorsal mesodermal area instead of notochord. On the basis of molecular marker analysis, however, the injection of Xmsx-1 RNA did not induce the expression of alpha-globin, nor reduce cardiac alpha-actin in dorsal marginal zone explants. Furthermore, a significant amount of alpha-actin was induced and alpha-globin was turned off in the ventral marginal zone explants injected with Xmsx-1. These results indicated that Xmsx-1 is a target gene of BMP-4 signaling, but possesses a distinct activity on dorsal-ventral patterning of mesodermal tissues.