We have cloned a cDNA encoding a Xenopus POU domain protein, XLPOU91, which is expressed at high levels in gastrula embryos. XLPOU91 transcription initiates at the midblastula transition, and declines to low levels by late neurula stages. In early neurula embryos, XLPOU91 transcripts are enriched 35-fold in the most ventroposterior versus anterior regions. Initial transcriptional activation of the gene is cell autonomous; the gene is activated in dissociated gastrula stage embryos as well as in animal cap explants. Cell-cell communication is needed for proper temporal down-regulation of XLPOU91 expression in late neurula embryos; cell dissociation during blastula stages or removal of explants from the embryo prevents normal transcriptional shunt down. Explants treated with peptide growth factors (PGFs) mimic the normal temporal and spatial shut down in whole embryos. This negative regulatory pathway may be important for determining cell fate or maintaining an inducible state in the ventroposterior region of the embryo.