The transforming growth factor-beta (TGF-beta) superfamily member, Xenopus nodal-related 3 (Xnr3), induces neural tissues through inhibition of bone morphogenetic proteins (BMPs). We recently identified an inhibitory mechanism in which the pro-region of Xenopus tropicalis nodal-related 3 (Xtnr3) physically interacts with BMP ligands. Here, we show that disulfide-linked heterodimerization does not contribute to BMP inhibition by Xtnr3 and that the Xtnr3 mature region, overexpression of which can induce the same phenotype as full-length Xtnr3, does not inhibit BMP signaling. Furthermore, we find that the BMP-inhibitory domains of Xtnr3 are separately located in the N- and C-terminal regions of the pro-region. These results indicate the pro-region of Nodal-related 3 is both necessary and sufficient for its BMP inhibition. (c) 2006 Elsevier Inc. All rights reserved.