The mid/hindbrain (MHB) junction can act as an organizer to direct the development of the midbrain and anterior hindbrain. In mice, Otx2 is expressed in the forebrain and midbrain and Gbx2 is expressed in the anterior hindbrain, with a shared border at the level of the MHB organizer. Here we show that, in Gbx2-/- mutants, the earliest phenotype is a posterior expansion of the Otx2 domain during early somite stages. Furthermore, organizer genes are expressed at the shifted Otx2 border, but not in a normal spatial relationship. To test whether Gbx2 is sufficient to position the MHB organizer, we transiently expressed Gbx2 in the caudal Otx2 domain and found that the Otx2 caudal border was indeed shifted rostrally and a normal appearing organizer formed at this new Otx2 border. Transgenic embryos then showed an expanded hindbrain and a reduced midbrain at embryonic day 9.5-10. We propose that formation of a normal MHB organizer depends on a sharp Otx2 caudal border and that Gbx2 is required to position and sharpen this border.