The Xenopus laevis tumorhead (TH) protein, a positive regulator of cell proliferation during embryogenesis, shuttles from the cell periphery into the nucleus during embryogenesis. In these studies, we performed a detailed analysis of TH's subcellular localization pattern to characterize its dynamic behavior. We found that TH exhibits distinct patterns of localization in different germ layers. At the blastula stage, TH is present in the apical cell periphery of prospective mesodermal and ectodermal cells. At the gastrula stage, TH is distributed throughout the entire cytoplasm of prospective mesodermal and ectodermal cells, whereas it shows nuclear localization in presumptive endodermal cells. TH moves into the nucleus of mesodermal and ectodermal cells during the neurula and early tailbud stages. To understand if TH is regulated by changes in its subcellular localization, we used a TH mutant containing signals for farnesylation and palmitoylation to tether the protein to the plasma membrane. Ubiquitous overexpression of this mutant causes embryonic lethality at the early gastrula transition. Further examination using TUNEL assays indicated that wild-type TH overexpression induces apoptosis during gastrulation, and that this effect is exacerbated by the overexpression of the membrane-bound TH mutant. Taken together, our results suggest that changes in the sub-cellular localization of the TH protein are important for its function because blocking the nuclear translocation of overexpressed TH increases apoptosis and causes embryos to die. Our data also suggest that TH plays a role outside the nucleus when it is present at the cell periphery.