Activin is a potent mesoderm inducing factor present in embryos of Xenopus laevis. Recent evidence has implicated activin in the inhibition of neural development in addition to the well-established induction of mesoderm in ectodermal explants. These diverse effects are critically dependent on the concentration of activin yet little is known about the mechanisms regulating the level of activin in the embryo. We report that the 3' untranslated region (3' UTR) of activin beta B mRNA inhibits the translation of activin in embryos. Micro-injection of activin mRNA from which the 3' UTR has been deleted is 8-10-fold more potent in inducing mesoderm than mRNA containing the 3' UTR. Truncation of the 3' UTR also leads to a marked enhancement of activin protein levels in embryos but has no effect when the truncated mRNA is translated in vitro. The 3' UTR also confers translational inhibition on a heterologous mRNA. These data show that a maternal factor(s) present in X. laevis regulates the translation of injected activin beta B mRNA. This factor(s) could be responsible for regulating the levels of endogenous activin beta B protein during mesoderm induction and the specification of ectodermal derivatives such as neural and epidermal tissues.