XTcf-3 transcription factor mediates beta-catenin-induced axis formation in Xenopus embryos.

XTcf-3 is a maternally expressed Xenopus homolog of the mammalian HMG box factors Tcf-1 and Lef-1. The N-terminus of XTcf-3 binds to beta-catenin. Microinjection of XTcf-3 mRNA in embryos results in nuclear translocation of beta-catenin. The beta-catenin-XTcf-3 complex activates transcription in a transient reporter gene assay, while XTcf-3 by itself is silent. N-terminal deletion of XTcf-3 (delta N) abrogates the interaction with beta-catenin, as well as the consequent transcription activation. This dominant-negative delta N mutant suppresses the induction of axis duplication by microinjected beta-catenin. It also suppresses endogenous axis specification upon injection into the dorsal blastomeres of a 4-cell-stage embryo. We propose that signaling by beta-catenin involves complex formation with XTcf-3, followed by nuclear translocation and activation of specific XTcf-3 target genes.