We have evaluated the role of retinoid signaling in the early development of the olfactory epithelium and olfactory bulb. When retinoid-mediated gene expression is blocked briefly in mouse embryos at midgestation with citral (a general alcohol dehydrogenase antagonist that is thought to interfere with retinoid synthesis), the spectrum of morphogenetic abnormalities includes disruption of olfactory pathway development. It is difficult, however, to assess the specificity of this pharmacological manipulation, insofar as it also compromises several other aspects of central nervous system development. In homozygous Pax6 mutant mice (small eye: Pax6(Sey-Neu)), there is a more discrete lesion to the olfactory pathway: The epithelium and bulb cannot be recognized at any time during development, whereas other forebrain subdivisions can still be recognized. This loss of the entire primary olfactory pathway is accompanied by a failure of retinoid-mediated gene expression limited to the frontonasal region and forebrain. Retinoid receptors are expressed in the forebrain of Pax6(Sey-Neu)/Pax6(Sey-Neu) embryos, and the mutant forebrain remains responsive to exogenous retinoic acid. However, in Pax6(Sey-Neu)/ Pax6(Sey-Neu) embryos, retinoic acid (RA) is not produced by the frontonasal mesenchyme, which normally provides local retinoid signals to the placode and forebrain. Together, these results suggest that local retinoid signaling is essential for the normal development of the mammalian olfactory pathway.