We describe the isolation and analysis in Xenopus of Xrel2, a novel member of the NF-kappa B/Rel protein family that remains to be described in other vertebrates. We show that Xrel2 is expressed throughout development but with higher levels in pre-gastrula embryos. Like other NF-kappa B/Rel proteins, Xrel2 protein is able to bind DNA at a kappa B-Motif. Ectopic expression of Xrel2 disrupts normal morphogenesis at the early gastrula stages suggesting that the NF-kappa B/Rel family have developmental functions at stages earlier than previously thought. We also show that the Xrel2 over-expression phenotype can be rescued by co-expression of I kappa B-alpha and that ectopic expression of I kappa B-alpha or I kappa B-gamma alone has no effect on development. Finally, we show that Xrel2 does not divert animal caps from an ectodermal to a mesodermal cell fate. Overall, these results suggest that the NF-kappa B/Rel family does have key functions in early vertebrate development, however, there is not a simple conservation of the Drosophila dorsal pathway.