Septo-optic dysplasia (SOD) is a congenital brain anomaly that results in pituitary, optic nerve, and midline forebrain defects. The etiology of SOD is poorly understood, with the majority of cases being sporadic. In rare instances, SOD is caused by mutations in Sox2, Sox3, or Hesx1, but how this manifests in disease is not entirely certain. We demonstrate here that mouse embryos lacking Sonic hedgehog (Shh) in the prospective hypothalamus exhibit key features of SOD, including pituitary hypoplasia and absence of the optic disc. The hypothalamic source of Shh is required to maintain gene expression boundaries along the anteroposterior and mediolateral neural axes that are important for proper pituitary and eye development, respectively. We further reveal that Sox2 and Sox3 are dose-dependent regulators of Shh transcription that directly bind and activate a long-range Shh forebrain enhancer. These data indicate that reduced levels of Shh expression in the hypothalamus cause SOD.
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