The CCAAT box transcription factor (CBTF) is a multimeric transcription factor that activates expression of the haematopoietic regulatory factor, GATA-2. The 122 kDa subunit of this complex, CBTF122, is cytoplasmic in fertilized Xenopus eggs and subsequently translocates to the nucleus prior to activation of zygotic GATA-2 transcription at gastrulation. Here we present data suggesting both a role for CBTF122 prior to its nuclear translocation and the mechanism that retains it in the cytoplasm before the midblastula transition (MBT). CBTF122 and its variant CBTF98 are associated with translationally quiescent mRNP complexes. We show that CBTF122 RNA binding activity is both necessary and sufficient for its cytoplasmic retention during early development. The introduction of an additional nuclear localization signal to CBTF122 is insufficient to overcome this retention, suggesting that RNA binding acts as a cytoplasmic anchor for CBTF122. Destruction of endogenous RNA by microinjection of RNase promotes premature nuclear translocation of CBTF122. Thus, the nuclear translocation of CBTF122 at the MBT is likely to be coupled to the degradation of maternal mRNA that occurs at that stage.