Vertebrate homologues of Drosophila labial are likely to play key roles in anteroposterior axis formation. However, little is known about the regulation of these genes during vertebrate development. Here we examine the expression and regulation of the Xenopus labial homeodomain genes, HoxA1 and HoxD1. HoxA1 was expressed around the dorsoventral circumference of the trunk in neurula embryos, with later expression in spinal cord, midbrain, hindbrain, and endolymphatic duct. By mid gastrula, HoxD1 was predominantly expressed in dorsolateral and ventral ectoderm, with a gap in expression at the dorsal midline. By neurula, ventral expression had declined with most expression restricted to dorsolateral mesoderm and ectoderm. Retinoic acid strongly induced HoxA1 and HoxD1 throughout the ectoderm and mesendoderm of gastrula stages, while in older embryos retinoids induced ectopic expression of these genes in more limited regions. Induction by retinoids was independent of protein synthesis. Surprisingly, HoxA1 was expressed at high levels in isolated animal caps in the absence of retinoic acid. The peptide growth factors bFGF and activin A strongly induced expression of HoxD1, but not HoxA1, in animal caps; however, RNA accumulated only many hours after the application of these factors. Overexpression of thyroid hormone receptor (c-erbA) prevented induction of HoxD1 by retinoic acid in animal caps. c-erbA also ablated expression of HoxD1 in whole embryos, suggesting a role for endogenous retinoids in the regulation of HoxD1 expression. Dominant interfering activin and FGF receptors prevented expression of HoxD1 in vivo, implicating these factors in the normal induction of HoxD1. Our data indicate that induction of labial-like homeodomain genes is complex and may require many factors.