We have identified and functionally characterized the Xenopus Xlmo4 gene, which encodes a member of the LIM-domain-only protein family. Xlmo4 is activated at gastrula stages in the mesodermal marginal zone probably in response to BMP4 signaling. Soon after, Xlmo4 is downregulated in the dorsal region of the mesoderm. This repression seems to be mediated by organizer-expressed repressors, such as Gsc. Xlmo4 downregulation is necessary for the proper formation of this territory. Increasing Xlmo4 function in this region downregulates Spemman Organizer genes and suppresses dorsal-anterior structures. By binding to Ldb1, Xlmo4 may restrict the availability of this cofactor for transcription factors expressed at the Spemman Organizer. In the ventral mesoderm, Xlmo4 is required to establish the identity of this territory by acting as a positive cofactor of GATA factors. In the neural ectoderm, Xlmo4 expression depends on Xiro homeoprotein activity. In this region, Xlmo4 suppresses differentiation of primary neurons and interferes with gene expression at the Isthmic Organizer, most likely by displacing Ldb1 from active transcription factor complexes required for these processes. Together, our data suggest that Xlmo4 uses distinct mechanisms to participate in different processes during development.