This gene belongs to the forkhead protein family of transcription factors which is characterized by a DNA-binding forkhead domain. FoxD3 functions as a transcriptional repressor and contains the C-terminal engrailed homology-1 motif (eh1), which provides an interactive surface with a transcriptional co-repressor Grg4 (Groucho-related gene-4).
Multiple studies have suggested Foxd3 involvement in the transition from naive to primed pluripotent stem cells in embryo development. Previously, Foxd3 was demonstrated to be required in maintaining pluripotency in mouse embryonic stem cells. A recent finding further showed that Foxd3 is necessary as a repressor in the transition from ESC to epiblast-like cells (EpiLC). The study proposed that Foxd3 is associated with inactivation of important naive pluripotency genes by its modification of chromatin structures via recruiting histone demethylases and decreasing the number of activating factors. Another proposed mechanism on the other hand argued that Foxd3 begins nucleosome removal and induction to a "primed" pluripotent state by recruiting Brg1, a nucleosome remodeler, and then acts as a repressor of maximal activation of those enhancers by recruiting histone deacetylases, suggesting a complex mediating function in which enhancers are primed for some future controlled time-point rather than immediate expression. While there is no ambiguity that Foxd3 plays an important role regulating the transition from naive to primed pluripotency state, the two models show a different process. Attempts to reconcile the conclusions of the two studies have further suggested that Foxd3 functions as all of the above.