A novel cysteine-rich motif, named LIM, has been identified in the homeo box genes lin-11, Isl-1, and mec-3; the mec-3 and lin-11 genes determine cell lineages in Caenorhabditis elegans. We isolated LIM class homeo box genes from Xenopus laevis that are closely related to lin-11 and mec-3 in the LIM and homeo domains. This paper deals with one of these genes, Xlim-1. Xlim-1 mRNA is found at low abundance in the unfertilized egg, has a major expression phase at the gastrula stage, decreases, and rises again during the tadpole stage. In adult tissues the brain shows the highest abundance, by far, of Xlim-1 mRNA. The maternal and late expression phases of the Xlim-1 gene suggest that it has multiple functions at different stages of the Xenopus life cycle. In the gastrula embryo, Xlim-1 mRNA is localized in the dorsal lip and the dorsal mesoderm, that is, in the region of Spemann's organizer. Explant experiments showed that Xlim-1 mRNA is induced by the mesoderm-inducer activin A and by retinoic acid, which is not a mesoderm inducer but affects patterning during Xenopus embryogenesis; application of activin A and retinoic acid together results in synergistic induction. The structure, inducibility, and localized expression in the organizer of the Xlim-1 gene suggest that it has a role in establishing body pattern during gastrulation.