To analyze the molecular mechanism of pattern formation in the anteriormost regions of the zebrafish embryo, we isolated two zebrafish sequences, zOtx1 and zOtx2, related to the Drosophila orthodenticle (otd) and two murine Otx genes. zOtx1 and zOtx2 encode predicted gene products which are 82% and 94% identical to the corresponding mouse proteins. Transcripts of both zebrafish genes appear abruptly at high levels in a triangular patch at the animal pole of the mid-gastrula, a region which contains cells fated to become midbrain and forebrain. Between 9 and 14 h of development, zOtx transcripts disappear from forebrain regions in a manner characteristic for each gene, and from 14 to 24 h, particular regions of the forebrain and midbrain express one or both genes. The posterior limit of expression of both genes in 10-30-h embryos forms a sharp boundary at the posterior border of the midbrain. As in the mouse, the early expression patterns of the zOtx genes are consistent with a role in defining midbrain and forebrain territories. However, there are a number of interesting differences between the forebrain and midbrain regions which express the genes in the two species.