One of the earliest organizational decisions in the development of the vertebrate brain is the division of the neural plate into Otx2-positive anterior and Gbx2-positive posterior territories. At the junction of these two expression domains, a local signaling center is formed, known as the midbrain-hindbrain boundary (MHB). This tissue coordinates or "organizes" the development of neighboring brain structures, such as the midbrain and cerebellum. Correct positioning of the MHB is thought to depend on mutual repression involving these two homeobox genes. Using a cell culture colocalization assay and coimmunoprecipitation experiments, we show that engrailed homology region 1 (eh1)-like motifs of both transcription factors physically interact with the WD40 domain of Groucho/Tle corepressor proteins. In addition, heat shock-induced expression of wild-type and mutant Otx2 and Gbx2 in medaka embryos demonstrates that Groucho is required for the repression of Otx2 by Gbx2. On the other hand, the repressive functions of Otx2 on Gbx2 do not appear to be dependent on corepressor interaction. Interestingly, the association of Groucho with Otx2 is also required for the repression of Fgf8 in the MHB. Therefore Groucho/Tle family members appear to regulate key aspects in the MHB development of the vertebrate brain.Gbx2 is a member of the homeobox gene family and has been identified in mammalian, avian, amphibian, and fish species (12,24,36,56,66). Gbx genes are related to the Drosophila unplugged gene, which is involved in tracheal branching (18). Gbx2 is a key player in the early patterning of the vertebrate brain and is expressed in the local signaling center known as the midbrain-hindbrain boundary (MHB) or isthmic organizer, which is positioned between the presumptive midbrain and hindbrain (reviewed in references 34, 54, 59, and 70). The Gbx2 expression domain is located at the region of the hindbrain, while the homeobox gene Otx2 is expressed in the presumptive forebrain and midbrain and thereby forms a common border with the Gbx2 domain at the position of the prospective MHB. Gbx2 mutant mice lack the anterior hindbrain and reveal a posterior expansion of the midbrain (67). In contrast, the anterior brain rostral to rhombomere 3 is deleted in Otx2-null mutant mice (3, 44). Misexpression of Gbx2 represses Otx2 expression in the posterior midbrain (46, 66), whereas misexpression of Otx2 in the anterior hindbrain represses Gbx2 expression in this region (11,35). Studies in Xenopus suggest that Otx and Gbx proteins needed for the positioning process function primarily as repressors rather than activators (28).Tle4 is one of the four full-length Groucho proteins in mammals (39, 63). The founding member of this conserved corepressor family is the Groucho gene of Drosophila. Groucho is known to play important roles in various developmental processes, including sex determination, segmentation, neurogenesis and dorsoventral patterning (22,50). Groucho family members are characterized by a conserved N-terminal glutamine-rich reg...