There are at least five murine Dlx genes that are related to the Drosophila Distal-less homeobox gene. The Dlx genes are primarily expressed in the developing forebrain, derivatives of the cranial neural crest and restricted epidermal craniofacial and limb domains. Dlx-2 is required for differentiation of subsets of cranial neural crest and forebrain cells. Previous genomic studies have shown that Dlx-1 and Dlx-2 are linked on mouse chromosome 2, near the HoxD cluster. Here we report a detailed analysis of the nucleotide sequence (approximately 14 kb), organization, and transcription of the murine Dlx-1 and Dlx-2 locus. In addition, we show that Dlx-1 makes multiple sense transcripts and at least one antisense transcript, whereas Dlx-2 makes one major transcript. The sequence of the human Dlx-2 gene is reported and is compared to that of the murine gene. Finally, sequence analysis of the deduced protein sequences reveals several candidate functional domains.