We report the isolation of a new homeobox gene from Xenopus laevis genomic DNA. The homeodomain sequence is highly diverged from the prototype Antennapedia sequence, and contains a unique histidine residue in the helix that binds to DNA. The homeodomain is followed by a 65 amino acid carboxyterminal domain, the longest found to date in any vertebrate homeobox gene. We have raised specific antibodies against an XlHbox 8-beta-gal fusion protein to determine the spatial and temporal expression of this gene. The nuclear protein first appears in a narrow band of the endoderm at stage 33 and develops into expression within the epithelial cells of the pancreatic anlagen and duodenum. Expression within the pancreatic epithelium persists into the adult frog. This unprecedented restriction to an anteroposterior band of the endoderm suggests that vertebrate homeobox genes might be involved in specifying positional information not only in the neuroectoderm and mesoderm, but also in the endoderm. Our data suggest that XlHbox 8 may therefore represent the first member of a new class of position-dependent transcription factors affecting endodermal differentiation.