We have examined the genetic mechanisms that regulate dorsal-ventral identity in the embryonic mouse telencephalon and, in particular, the specification of progenitors in the cerebral cortex and striatum. The respective roles of Pax6 and Gsh2 in cortical and striatal development were studied in single and double loss-of-function mouse mutants. Gsh2 gene function was found to be essential to maintain the molecular identity of early striatal progenitors and in its absence the ventral telencephalic regulatory genes Mash1 and Dlx are lost from most of the striatal germinal zone. In their place, the dorsal regulators, Pax6, neurogenin 1 and neurogenin 2 are found ectopically. Conversely, Pax6 is required to maintain the correct molecular identity of cortical progenitors. In its absence, neurogenins are lost from the cortical germinal zone and Gsh2, Mash1 and Dlx genes are found ectopically. These reciprocal alterations in cortical and striatal progenitor specification lead to the abnormal development of the cortex and striatum observed in Pax6 (small eye) and Gsh2 mutants, respectively. In support of this, double homozygous mutants for Pax6 and Gsh2 exhibit significant improvements in both cortical and striatal development compared with their respective single mutants. Taken together, these results demonstrate that Pax6 and Gsh2 govern cortical and striatal development by regulating genetically opposing programs that control the expression of each other as well as the regionally expressed developmental regulators Mash1, the neurogenins and Dlx genes in telencephalic progenitors.

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