Abstract XLPOU91, a POU-homeobox gene is expressed in a narrow window during early Xenopus development. We show that ectopic expression of XLPOU91 RNA causes severe posterior truncations in embryos without inhibiting the formation of Spemann's organizer. Ectopic XLPOU91 expression also inhibits mesoderm induction by fibroblast growth factor (FGF) and activin in animal cap explants. Using antisense RNA, we depleted endogenous XLPOU91 protein in animal caps. Gastrula-stage animal caps expressing XLPOU91 antisense RNA do not lose competence to FGF, unlike controls, these animal caps express XBra after FGF treatment. Endogenous XLPOU91 levels are peaking when FGF mesoderm-inducing competence is lost in animal caps. Thus XLPOU91 protein may act as a competence switch during early development, as XLPOU91 levels increase in the embryo, the mesoderm response to FGF is lost.