The POU domain gene, XlPOU 2 is an essential downstream determinant of neural induction

Bone morphogenetic protein 1 (BMP1) is a metalloprotease that ventralises dorsal mesoderm when overexpressed in early Xenopus embryos. Here we show that Xenopus BMP1 blocks the dorsalising activity of chordin, but not noggin or DeltaxBMPR, when coexpressed in the ventral marginal zone and degrades chordin protein in vitro. We also show that a dominant-negative mutation for XBMP1 (dnBMP1) dorsalises ventral mesoderm in vivo, and blocks degradation of chordin by both XBMP1 and Xolloid, a closely related Xenopus metalloprotease, in vitro. dnBMP1 does not dorsalise ventral mesoderm in UV-irradiated embryos, demonstrating that this activity is dependent upon a functional organiser--the natural source of chordin in Xenopus gastrulae. Our results suggest that XBMP1 may regulate the availability of chordin during vertebrate embryogenesis.