naling pathway. For this, we focused on Pea3/Ets (Pea3, Erm, Er81), a subfamily of Ets transcription factors, since it has been suggested that Pea3/Ets is a direct transcriptional target of Fgf signaling. We first checked that Pea3 and Erm are expressed in the midbrain and the hindbrain around stage10 of the chick embryos. We then obtained results that Pea3 and Erm expressions are regulated by Fgf-Ras/ERK signaling; Pea3/Erm were induced after misexpression of Fgf8 and repressed by misexpression of dominant-negative form of Ras. In order to examine function of Pea3/Erm in the isthmus, we constructed dominant-negative form of Pea3 (Pea3-DN) and misexpressed it in the mesencephalon and the metencephalon at st.9 chick embryos. Surprisingly, Shh was ectopically induced at Pea3DN expressing sites in the midbrain and hindbrain. Oculomotor neurons that differentiate in the ventral midbrain differentiated ectopically in the dorsal side of the midbrain. It is speculated that Fgf signaling is involved in not only caudorostral axis formation, but also ventro-dorsal axis formation of the midbrain by repressing Shh through Pea3/Ets transcription factors.