We have identified cis-regulatory sequences acting on Otx2 expression in epiblast (EP) and anterior neuroectoderm (AN) at about 90 kb 5' upstream. The activity of the EP enhancer is found in the inner cell mass at E3.5 and the entire epiblast at E5.5. The AN enhancer activity is detected initially at E7.0 and ceases by E8.5; it is found later in the dorsomedial aspect of the telencephalon at E10.5. The EP enhancer includes multiple required domains over 2.3 kb, and the AN enhancer is an essential component of the EP enhancer. Mutants lacking the AN enhancer have demonstrated that these cis-sequences indeed regulate Otx2 expression in EP and AN. At the same time, our analysis indicates that another EP and AN enhancer must exist outside of the -170 kb to +120 kb range. In Otx2DeltaAN/- mutants, in which one Otx2 allele lacks the AN enhancer and the other allele is null, anteroposterior axis forms normally and anterior neuroectoderm is normally induced. Subsequently, however, forebrain and midbrain are lost, indicating that Otx2 expression under the AN enhancer functions to maintain anterior neuroectoderm once induced. Furthermore, Otx2 under the AN enhancer cooperates with Emx2 in diencephalon development. The AN enhancer region is conserved among mouse, human and Xenopus; moreover, the counterpart region in Xenopus exhibited an enhancer activity in mouse anterior neuroectoderm.