The dachshund gene of Drosophila encodes a putative transcriptional regulator required for eye and leg development. We show here that dachshund is also required for normal brain development. The mushroom bodies of dachshund mutants exhibit a marked reduction in the number of (&agr;) lobe axons, a disorganization of axons extending into horizontal lobes, and aberrant projections into brain areas normally unoccupied by mushroom body processes. The phenotypes become pronounced during pupariation, suggesting that dachshund function is required during this period. GAL4-mediated expression of dachshund in the mushroom bodies rescues the mushroom body phenotypes. Moreover, dachshund mutant mushroom body clones in an otherwise wild-type brain exhibit the phenotypes, indicating an autonomous role for dachshund. Although eyeless, like dachshund, is preferentially expressed in the mushroom body and is genetically upstream of dachshund for eye development, no interaction of these genes was detected for mushroom body development. Thus, dachshund functions in the developing mushroom body neurons to ensure their proper differentiation.