XBF-2 is a transcriptional repressor that converts ectoderm into neural tissue.

We have identified Xenopus Brain Factor 2 (XBF-2) as a potent neuralizing activity in an expression cloning screen. In ectodermal explants, XBF-2 converts cells from an epidermal to a neural fate. Such explants contain neurons with distinct axonal profiles and express both anterior and posterior central nervous system (CNS) markers. In striking contrast to X-ngnR-1a or X-NeuroD, ectopic expression of XBF-2 in Xenopus embryos results in an expansion of the neural plate to the ventral midline. The enlarged neural plate consists predominantly of undifferentiated neurons. XBF-2 lies downstream of the BMP antagonists noggin, cerberus, and gremlin since ectodermal explants expressing these molecules exhibit strong expression of XBF-2. While XBF-2 does not upregulate the expression of secreted neural inducers, it downregulates the transcription of BMP-4, an epidermal inducer. We show that XBF-2 acts as a transcriptional repressor and that its effects can be phenocopied with either the engrailed or hairy repressor domain fused to the XBF-2 DNA-binding domain. A fusion of the DNA-binding domain to the activator domain of VP16 blocks the effects of XBF-2 and prevents neural plate development in the embryo. This provides evidence that a transcriptional repressor can affect both regional neural development and neurogenesis in vertebrates.