The gene Fgf-3 is expressed in rhombomeres 5 and 6 of the hindbrain and has been functionally implicated in otic development. We describe new sites of expression of this gene in mouse embryos in the forebrain, the midbrain-hindbrain junction region, rhombomere boundaries, a cranial surface ectodermal domain that includes the otic placode, and in the most recently formed somite. In the early hindbrain, high levels of Fgf-3 transcripts are present in rhombomere 4. The surface ectodermal domain at first (day 8 1/2) extends laterally from rhombomeres 4 and 5 (prorhombomere B), in which neuroepithelial levels of expression are highest, to the second pharyngeal arch ventrally; at day 9, when the region of highest level of neuroepithelial Fgf-3 expression is in rhombomeres 5 and 6, the dorsal origin of the surface ectodermal domain is also at this level, extending obliquely to the otic placode and the second arch. The initially high level of Fgf-3 transcripts in the otic placode is downregulated as the placode invaginates to form the otic pit. Fgf-3 is a good marker for the epithelium of pharyngeal arches 2 and 3, and our in situ hybridization results confirm the dual identity of the apparently fused first and second arches in some retinoic acid-exposed embryos, and the fusion of the first arch with the maxillary region in others. Correlation between Fgf-3 expression and morphological pattern in craniofacial tissues of normal and retinoic acid-exposed embryos indicates that prorhombomere B, the second arch and the otic ectoderm represent a cranial segment whose structural integrity is maintained when hindbrain morphology and pharyngeal arch morphology are altered. Comparison of normal Fgf-3 expression domains with those of Fgf-4 and with the phenotype of Fgf-3-deficient mutant embryos suggests that there is some functional redundancy between Fgf-3 and Fgf-4 in otic induction and second arch development.