Vg1, a member of the transforming growth factor-beta family involved in mesoderm induction, is translated subsequent to the localization of its mRNA to the vegetal pole of Xenopus oocytes. Whereas the localization of Vg1 mRNA is known to be directed by the 3' untranslated region (UTR), the basis of its translational regulation is unknown. We show here that the 3' UTR of Vg1 causes translational repression of two different reporter mRNAs in Xenopus oocytes. A 350-nucleotide region of the 3' UTR, which is distinct from the localization element, is necessary and sufficient for mediating translational repression and specifically binds to a 38-kDa polypeptide. The translational repression activity is found throughout the oocyte and at all stages of oogenesis. These results suggest that factors colocalized with Vg1 mRNA at the vegetal pole relieve translational repression to allow expression of Vg1 protein.