Patterning the developing nervous system in the mouse has been proposed to depend on two separate sources of signals, the anterior visceral endoderm (AVE) and the node or organizer. Mutation of the winged-helix gene HNF3beta leads to loss of the node and its derivatives, while mutation of the homeobox gene Otx2 results in loss of head structures, apparently at least partially because of defects in the AVE. To investigate the potential genetic interactions between the two signaling centers, we crossed Otx2+/- and HNF3beta+/- mice and found that very few Otx2+/-;HNF3beta+/- double heterozygous mutants survived to weaning. Normal Mendelian ratios of genotypes were observed during gestation, but more than half the double heterozygotes displayed a severe anterior patterning phenotype that would be incompatible with postnatal survival. The phenotype was characterized by varying degrees of holoprosencephaly, cyclopia with proboscis-like structures, and anterior forebrain truncations. Regional marker analysis revealed that ventral forebrain structures of Otx2+/-;HNF3beta+/- mutant embryos were most severely affected. Shh expression was completely absent in the anterior region of Otx2+/-;HNF3beta+/- embryos, suggesting that Otx2 and HNF3beta genetically interact, directly or indirectly, to regulate Shh expression in the anterior midline. In addition, the forebrain truncations suggest an involvement of both genes in anterior patterning, through their overlapping expression domains in either the AVE and/or the prechordal mesoderm.