The CyIIIa cytoskeletal actin gene of the sea urchin Strongylocentrotus purpuratus is activated in late cleavage and expressed exclusively in the aboral ectoderm territory of the embryo. Previous gene transfer studies defined a 2.3 kb cis-regulatory region that is necessary and sufficient for correct temporal and spatial expression of a CyIIIa.CAT fusion gene. In this paper, a negative regulatory element within this region was identified that is required for repression of the CyIIIa gene in skeletogenic mesenchyme cells. The repression mediated by this regulatory element takes place after initial territorial specification. A cDNA clone encoding a DNA-binding protein with twelve Zn fingers (SpZ12-1) was isolated by probing an expression library with this cis-element. Deletion analysis of the SpZ12-1 protein confirmed that a DNA-binding domain is located within the Zn finger region. SpZ12-1 is the only DNA-binding protein in embryo nuclear extract that interacts with the specific cis-target sites required for repression of CyIIIa.CAT in skeletogenic mesenchyme and is likely to be the trans factor that mediates this repression.