Pitx2, a homeodomain transcription factor, is essential for normal development of the pituitary gland, craniofacial region, eyes, heart, abdominal viscera, and limbs. Complete loss of Pitx2 in mice (Pitx2(-/-)) results in embryonic lethality by approximately e15 due to cardiac defects, whereas embryos with partial loss of function (Pitx2(neo/-) or Pitx2(neo/neo)) survive until later in development (e17-e19). Pitx2 is expressed in discrete populations of postmitotic neurons in the mouse brain, but its role in mammalian central nervous system (CNS) development is not known. We undertook an analysis of Pitx2-deficient embryos to determine whether loss of Pitx2 affects CNS development. The CNS is normal in hypomorphic e16.5 Pitx2(neo/-) and e18.5 Pitx2(neo/neo) embryos, with no evidence of midline or other defects. Midgestation (e10.5) Pitx2(-/-) embryos have normally formed neural tube structures and cerebral vesicles, whereas older (e14.5) Pitx2(-/-) embryos exhibit loss of gene expression and axonal projections in the subthalamic nucleus (a group of cells in the ventrolateral thalamus) and in the developing superior colliculus of dorsal midbrain. Our results suggest a role for Pitx2 in regulating regionally specific terminal neuronal differentiation in the developing ventrolateral thalamus and midbrain.