Hepatocyte nuclear factor 4 (HNF4) is an orphan receptor of the nuclear receptor superfamily and expressed in vertebrates as a tissue-specific transcription factor in liver, kidney, intestine, stomach, and pancreas. It also plays a crucial role in early embryonic development and has been identified as a maternal component in the Xenopus egg. We now report on an activity present in Xenopus embryos that inhibits the DNA binding of HNF4. This HNF4 inhibitor copurifies with a 25-kDa protein under nondenaturing conditions but can be separated from this protein by sodium dodecyl sulfate treatment. Protease treatment of the inhibitor results in a core fragment of about 5 kDa that retains full inhibitory activity. The activity of the HNF4 inhibitor can also be monitored in the absence of DNA, as it alters the mobility of the HNF4 protein in native polyacrylamide gels and the accessibility of antibodies. Comparing the activity of the HNF4 inhibitor with acyl coenzyme A's, recently proposed to be ligands of HNF4, we observe a more stringent specificity for the HNF4 inhibitor activity. Using deletion constructs of the HNF4 protein, we could show that the potential ligand-binding domain of HNF4 is not required, and thus the HNF4 inhibitor does not represent a classical ligand as defined for the nuclear receptor superfamily. Based on our previous finding that maternal HNF4 is abundantly present in Xenopus embryos but the target gene HNF1 is only marginally expressed, we propose that the HNF4 inhibitor functions in the embryo to restrict the activity of the maternal HNF4 proteins.