INTRODUCTION The Rel/NF-κB gene family encodes a large group of eukaryotic transcriptional factors that regulate a wide diversity of physiological cell differentiation events, including inflammation, immunity and apoptosis. These ubiquitous proteins are activated by a number of physiological stimuli and also activate a variety of cellular targets (for reviews, see Chen and Ghosh, 1999; Pahl, 1999; Israel, 2000). Depending on the cell type, Rel/NF-κB dimeric complexes regulate transcription from target genes in either a constitutive or inducible manner. Inducible complexes are retained in the cytoplasm by a regulatory subunit related to the IκB family of inhibitors. Upon cellular activation, IκB is removed by the ubiquitin-proteosomal degradation pathway allowing the Rel/NF-κB complex to translocate to the nucleus, whereupon it binds to a consensus decameric sequence within target genes. In addition to processes related to adult cell differentiation, Rel/NF-κB transcriptional regulators are required in embryonic and foetal development. The patterning of the dorsal-ventral axis of the Drosophila embryo, for instance, depends on the activity of the morphogen Dorsal. Dorsal is localised by the activity of a number of maternal genes, including Toll, easter, spätzle, tube and pelle, to nuclei of blastoderm cells in a dorsal-to-ventral gradient (Drier et al., 2000). Dorsal activates patterning genes in ventral and ventrolateral regions such as twist and snail, which specify mesodermal and neurogenic cell lineages (Drier and Steward, 1997; Govind, 1999). In Xenopus laevis embryos, the finding that members of the Toll/Spätzle signalling pathway could induce a secondary body axis suggests that a Dorsal-like morphogen might also exist in amphibians (Armstrong et al., 1998). In mammalian development, the role of Rel/NF-κB proteins appears to be confined largely to immunity and organogenesis. Mice that are defective for Nfkb1, Rel (c-rel) or Relb develop deficiencies in specific cells of the immune system (Attar et al., 1997; Gerondakis et al., 1999). Rela- defective foetal mice die of liver failure resulting from massive apoptosis, illustrating the role of Rel/NF-κB as an anti-apoptotic factor (Foo and Nolan, 1999; Barkett and Gilmore, 1999; Chen et al., 2000). Thus, these specific Rel/NF-κB proteins are not required for body patterning, but there may be undiscovered Rel/NF-κB activities and/or embryonic genes, since mouse homologues of twist are required for mesoderm formation in mammals (Dixon, 1997). The sonic hedgehog (Shh) ligand, its downstream target (the zinc-finger transcriptional activator Gli1), and related Gli proteins Gli2 and Gli3, form the basis of an important signalling pathway in organogenesis and tumourigenesis (Hahn et al., 1999; Ruiz i Altaba, 1999; Britto et al., 2000). There is evidence that Rel/NF-κB activates this pathway in vertebrates. In developing chick limbs, negative regulation of 263 Development 128, 263-273 (2001) Printed in Great Britain © The Company of Biologists Limited 2001 DEV3274 The Rel/NF-κB gene family encodes a large group of transcriptional activators involved in myriad differentiation events, including embryonic development. We have shown previously that Xrel3, a Xenopus Rel/NF- κB-related gene, is expressed in the forebrain, dorsal aspect of the mid- and hindbrain, the otocysts and notochord of neurula and larval stage embryos. Overexpression of Xrel3 causes formation of embryonic tumours. We now show that Xrel3-induced tumours and animal caps from embryos injected with Xrel3 RNA express Otx2, Shh and Gli1. Heterodimerisation of a C-terminally deleted mutant of Xrel3 with wild-type Xrel3 inhibits in vitro binding of wild- type Xrel3 to Rel/NF-κB consensus DNA sequences. This dominant interference mutant disrupts Shh, Gli1 and Otx2 mRNA patterning and inhibits anterior development when expressed in the dorsal side of zygotes, which is rescued by co-injecting wild-type Xrel3 mRNA. In chick development, Rel activates Shh signalling, which is required for normal limb formation; Shh, Gli1 and Otx2 encode important neural patterning elements in vertebrates. The activation of these genes in tumours by Xrel3 overexpression and the inhibition of their expression and head development by a dominant interference mutant of Xrel3 indicates that Rel/NF-κB is required for activation of these genes and for anterior neural patterning in Xenopus. Key words: Rel/NF-κB, Head development, Shh, Gli1, Otx2, Tumours, Oncogenes, Xenopus SUMMARY Xrel3 is required for head development in Xenopus laevis Blue B. Lake*, Rebecca Ford* and Kenneth R. Kao ‡ Terry Fox Cancer Research Laboratories, Faculty of Medicine, Memorial University of Newfoundland, St John’s, Newfoundland A1B 3V6, Canada *These authors contributed equally to this work ‡ Author for correspondence (e-mail: kkao@mun.ca) Accepted 27 October; published on WWW 21 December 2000