The development of the forebrain in homozygous extra-toes mutants (Xt/Xt) was examined histologically from day 11.5 to day 16.5 of gestation. It is shown that until day 16.5 of gestation, the forebrains of Xt/Xt mutant embryos develop neither an olfactory bulb nor a choroid plexus in the lateral ventricles, and do not exhibit lamination in the cerebral cortex. Glial fibrillary acidic protein (GFAP)-expressing glial cells are detected in the prospective cerebral cortex of Xt/Xt animals, indicating that differentiation to glial cells is not disturbed. Upon comparison with a Splotch mutant, it is demonstrated that delayed closure of the anterior neuropore cannot account for the extra-toes specific defect in the developing cerebral cortex. It is, therefore, suggested that the forebrain phenotype in Xt/Xt mutant embryos is caused by the direct action of the mutation on the forebrain. As the zinc finger gene Gli-3 is deleted in extra-toes mutants, these observations suggest that the proper expression of the Gli-3 gene in the forebrain is a prerequisite for the normal development of the telencephalon and later of the cerebral cortex.