Cell-autonomous repression of shh by transcription factor pax6 regulates diencephalic patterning by controlling the central diencephalic organizer

During development, region-specific patterns of regulatory gene expression are controlled by signaling centers that release morphogens providing positional information to surrounding cells. Regulation of signaling centers themselves is therefore critical. The size and the influence of a Shh-producing forebrain organizer, the zona limitans intrathalamica (ZLI), are limited by Pax6. By studying mouse chimeras, we find that Pax6 acts cell autonomously to block Shh expression in cells around the ZLI. Immunoprecipitation and luciferase assays indicate that Pax6 can bind the Shh promoter and repress its function. An analysis of chimeras suggests that many of the regional gene expression pattern defects that occur in Pax6^−/− diencephalic cells result from a non-cell-autonomous position-dependent defect of local intercellular signaling. Blocking Shh signaling in Pax6^−/− mutants reverses major diencephalic patterning defects. We conclude that Pax6’s cell-autonomous repression of Shh expression around the ZLI is critical for many aspects of normal diencephalic patterning.