The eukaryotic initiation factor (eIF) 4G family plays a central role during translation initiation, bridging between the 5' and 3' ends of the mRNA via its N-terminal third while recruiting other factors and ribosomes through its central and C-terminal third. The protein p97/NAT1/DAP5 is homologous to the central and C-terminal thirds of eIF4G. p97 has long been considered to be a translational repressor under normal cellular conditions. Further, caspase cleavage liberates a p86 fragment that is thought to mediate cap-independent translation in apoptotic cells. We report here that, surprisingly, human p97 is polysome associated in proliferating cells and moves to stress granules in stressed, nonapoptotic cells. Tethered-function studies in living cells show that human p97 and p86 both can activate translation; however, we were unable to detect polysome association of p86 in apoptotic cells. We further characterized the zebrafish orthologs of p97, and found both to be expressed throughout embryonic development. Their simultaneous knockdown by morpholino injection led to impaired mesoderm formation and early embryonic lethality, indicating conservation of embryonic p97 function from fish to mammals. These data indicate that full-length p97 is a translational activator with essential role(s) in unstressed cells, suggesting a reassessment of current models of p97 function.