The development of the vertebrate brain depends on the formation of local organizing centres within the neural tube that express secreted signals that refine local neural progenitor identity. The isthmic organizer (IsO) forms at the isthmic constriction and is required for the growth and ordered development of mesencephalic and metencephalic structures. The formation of the IsO, which is characterized by the generation of a complex pattern of cells at the midbrain-hindbrain boundary, has been described in detail. However, when neural plate cells are initially instructed to form the IsO, the molecular nature of the inductive signals remain poorly defined. We now provide evidence that convergent Wnt and FGF signaling at the gastrula stage are required to generate the complex polarized pattern of cells characteristic of the IsO, and that Wnt and FGF signals in combination are sufficient to reconstruct, in naïve forebrain cells, an IsO-like structure that exhibits an organizing activity that mimics the endogenous IsO when transplanted into the diencephalon of chick embryos.