SoxB1 sub-family of transcriptional regulators are expressed in progenitor (NP) cells throughout the neuroaxis and are generally downregulated during neuronal differentiation. Gain- and loss-of-function studies indicate that Sox1, Sox2 and Sox3 are key regulators of NP differentiation and that their roles in CNS development are largely redundant. Nevertheless, mutation of each SoxB1 individually results in a different array of CNS defects, raising the possibility that SoxB1 proteins have subtly different functions in NP cells. To explore the mechanism of SOXB1 functional redundancy, and to identify genes that are most sensitive to loss of the Sox3 gene, we performed genome wide expression profiling of Sox3 null NP cells. Nineteen genes with abnormal expression were identified, including the homeobox gene Dbx1. Analysis of Sox3 null embryos revealed that Dbx1 was significantly reduced in the neural tube and developing brain and that SOX3 bound directly to conserved elements associated with this gene in cultured NP cells and in vivo. These data define Dbx1 as a direct SOX3 target gene whose expression, intriguingly, is not fully rescued by other SOXB1 transcription factors, suggesting that there are inherent differences in SOXB1 protein activity.