We have studied the localization of the proteins of Xeb1 and Xeb2, two homeobox (hbx)-containing genes that are expressed during the early development of Xenopus laevis. Both proteins are expressed in juxtaposed and partially overlapping domains along the antero-posterior axis of Xenopus laevis embryos, with clearly defined anterior boundaries. Xeb2 is predominantly expressed in the caudal region of the hindbrain, whereas the Xeb1 protein is located in the most rostral region of the spinal cord. Furthermore, both proteins are expressed in single cells dispersed in the lateral flanks of the embryo in positions that correlate with the expression domains in the neural tube. We suggest that these cells are migratory neural crest cells that have acquired positional information in the neural tube prior to migration. The Xeb2 protein was also detected in the most posterior branchial arches and the pronephros. In stage 45 embryos, nuclei of the IX-X cranial ganglia, the lung buds and cells spreading into the forelimb rudiment express the Xeb2 antigen. The Xeb1 protein was also detected in the lung buds and the forelimb rudiment. To examine the effect of retinoic acid on expression, gastrula embryos were treated with all-trans retinoic acid (RA). Increasing concentrations of RA caused progressive truncation of anterior structures. The most severely affected embryos lacked eyes, nasal pits, forebrain, midbrain and otic vesicles, and the anterior boundary of the hindbrain seemed to be displaced rostrally. This alteration correlates with a progressive displacement of the anterior boundary of the expression domain of Xeb2. On the other hand, 10(-6) M RA induces an ectopic site of Xeb1 expression at the anterior end of the central nervous system, located just anterior to the extended domain of Xeb2 whereas expression in the spinal cord remains unaffected.