In this report, we have used mRNA injection to study the action of mutants of XrelA, a Xenopus homolog of the RelA (p65) component of NF-kappaB, on the induction of mesoderm in Xenopus embryos. A region of the rel homology domain of XrelA was deleted to create XrelA deltaSP, which retains the dimerization and activation domains, but no longer binds to DNA. We also made an analogous derivative of mammalian NF-kappaB1 (p50). We show that both constructs have dominant inhibitory activity. When message encoding either is injected into eggs or oocytes, DNA binding of rel family members is suppressed, as is transactivation of a kappaB-dependent promoter in embryos. Expression of XrelA deltaSP in animal caps blocks the induction of mesoderm by bFGF. In addition, this mutant prevents elongation movements generated by activin, but has little effect on posterior dorsal cytodifferentiation, which in marked contrast is blocked by inhibition of the FGF signal transduction pathway between the receptor and MAP kinase. The specificity of the XrelA deltaSP effect on FGF signaling is shown by rescue of mesodermal marker expression when XrelA deltaSP is co-expressed with a specific rel inhibitor. The target of these dominant negative constructs seems to be neither XrelA itself, nor p50, but rather some other molecule with which XrelA, rather than NF-kappaB1, heterodimerizes. We show that XrelA deltaSP blocks FGF induction of mesoderm downstream of MAP kinase and Xbra expression. Thus it prevents the maintenance of Xbra expression by inhibiting its autoregulation by embryonic FGF (eFGF). We suggest that XrelA deltaSP differs from other reported inhibitors of FGF signaling because it inhibits only gastrula stage FGF signaling and not the maternally programmed signaling at the blastula stage. Our results therefore suggest that zygotic FGF action is required for cell movements rather than dorsal differentiation.