The Xlim-1 gene is activated in the late blastula stage of Xenopus embryogenesis in the mesoderm, and its RNA product becomes concentrated in the Spemann organizer at early gastrula stage. A major regulator of early expression of Xlim-1 is activin or an activin-like signal. We report experiments aiming to identify the activin response element in the Xlim-1 gene. The 5' flanking region of the gene contains a constitutive promoter that is not activin responsive, whereas sequences in the first intron mediate repression of basal promoter activity and stimulation by activin. An intron-derived fragment of 212 nt is the smallest element that could mediate activin responsiveness. Nodal and act-Vg1, factors with signaling properties similar to activin, also stimulated Xlim-1 reporter constructs, whereas BMP-4 did not stimulate or repress the constructs. The mechanism of activin regulation of Xlim-1 and the sequence of the response element are distinct from activin response elements of other genes studied so far.