Xenopus XlHbox 1 produces two transcripts during early development. One encodes a long open reading frame (ORF) and the other a short ORF sharing the same homeodomain, but differing by an 82 amino acid domain at the amino terminus. The long protein amino terminus is conserved with many other homeodomain proteins, and its absence from the short protein could have functional consequences. Some viral genes also utilize a single ORF to encode transcription factors of antagonistic functions. The overall organization of the homologous genes in frog and man is similar, supporting the notion that both transcripts are of functional significance. Studies on XlHbox 1 function show that the region common to the long and short proteins has a sequence-specific DNA-binding activity, and that microinjection of specific antibodies into embryos results in the loss of structures derived from cells normally expressing XlHbox 1.