BACKGROUND: In addition to its well-known expression in dorsal telencephalic progenitor cells, where it regulates cell proliferation and identity, the transcription factor Pax6 is expressed in some ventral telencephalic cells, including many postmitotic neurons. Its functions in these cells are unknown. RESULTS: We generated a new floxed allele of Pax6 and tested the consequences of a highly specific ventral telencephalic depletion of Pax6. We used the Six3A1A2-Cre allele that drives production of Cre recombinase in a specific region of Pax6-expression close to the internal capsule, through which thalamic axons navigate to cerebral cortex. Depletion in this region caused many thalamic axons to take aberrant routes, either failing to turn normally into ventral telencephalon to form the internal capsule or exiting the developing internal capsule ventrally. We tested whether these defects might have resulted from abnormalities of two structural features proposed to guide thalamic axons into and through the developing internal capsule. First, we looked for the early pioneer axons that project from the region of the future internal capsule to the thalamus and are thought to guide thalamocortical axons to the internal capsule: we found that they are present in conditional mutants. Second, we examined the development of the corridor of Islet1-expressing cells that guides thalamic axons through ventral telencephalon and found that it was broader and less dense than normal in conditional mutants. We also examined corticofugal axons that are thought to interact with ascending thalamocortical axons, resulting in each set providing guidance to the other, and found that some are misrouted to lateral telencephalon. CONCLUSION: These findings indicate that ventral telencephalic Pax6 is important for formation of the Islet1-expressing corridor and the thalamic and cortical axons that grow through it. We suggest that Pax6 might affect thalamic axonal growth indirectly via its effect on the corridor.