Caudalizing factors operate in the context of Wnt/β-catenin signaling to induce gene expression in discrete compartments along the rostral-caudal axis of the developing vertebrate nervous system. In zebrafish, basal repression of caudal genes is achieved through the function of Headless (Hdl),a Tcf3 homolog. In this study, we show that a second Tcf3 homolog, Tcf3b,limits caudalization caused by loss of Hdl function and although this Lef/Tcf family member can rescue hdl mutants, Lef1 cannot. Wnts can antagonize repression mediated by Tcf3 and this derepression is dependent on a Tcf3 β-catenin binding domain. Systematic changes in gene expression caused by reduced Tcf3 function help predict the shape of a caudalizing activity gradient that defines compartments along the rostral-caudal axis. In addition, Tcf3b has a second and unique role in the morphogenesis of rhombomere boundaries, indicating that it controls multiple aspects of brain development.

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