Two alternatively spliced products of the human E2A gene, E12 and E47, encode helix-loop-helix DNA-binding proteins. Here we describe the isolation of two Xenopus cDNAs; one, XE12, is structurally similar to human E12 and the other contains a sequence similar to E47. Transcripts of both cDNAs are present at all the stages of Xenopus development tested and in all regions of the embryo. The DNA binding properties of in vitro translated XE12 are indistinguishable from those of human E12. We have shown previously that an embryonic muscle DNA-binding activity, EMF1, that binds to a promoter sequence required for the expression of the cardiac actin gene, contains the Xenopus myogenic factor XMyoD. Here we show that it also contains protein that interacts with an anti-E12 antiserum, suggesting that XE12 and XMyoD proteins, or very similar ones, are present in EMF1. We have addressed the functional role of XE12 in muscle gene transcription in Xenopus embryos by injecting in vitro synthesized RNA into the two cell embryo. Overexpression of XE12 and XMyoD augments by greater than 10-fold the ectopic activation of the endogenous cardiac actin gene that can be produced by XMyoD alone. Our DNA binding results strongly suggest that this effect is mediated through a direct interaction of the XE12-XMyoD complex with specific sites in the cardiac actin promoter. We suggest that XE12 is functionally important in muscle gene activation in embryonic development.