Irx3 and Pax6 establish differential competence for Shh-mediated induction of GABAergic and glutamatergic neurons of the thalamus.

During embryonic development, the presumptive GABAergic rostral thalamus (rTh) and glutamatergic caudal thalamus (cTh) are induced by Sonic hedgehog (Shh) signaling from the zona limitans intrathalamica (ZLI) at the rostral border of the thalamic primordium. We found that these inductions are limited to the neuroepithelium between the ZLI and the forebrain-midbrain boundary, suggesting a prepattern that limits thalamic competence. We hypothesized that this prepattern is established by the overlapping expression of two transcription factors: Iroquois-related homeobox gene 3 (Irx3) posterior to the ZLI, and paired box gene 6 (Pax6) anterior to the forebrain-midbrain boundary. Consistent with this assumption, we show that misexpression of Irx3 in the prethalamus or telencephalon results in ectopic induction of thalamic markers in response to Shh, that it functions as a transcriptional repressor in this context, and that antagonizing its function in the diencephalon attenuates thalamic specification. Similarly, misexpression of Pax6 in the midbrain together with Shh pathway activation results in ectopic induction of cTh markers in clusters of cells that fail to integrate into tectal layers and of atypical long-range projections, whereas antagonizing Pax6 function in the thalamus disrupts cTh formation. However, rTh markers are negatively regulated by Pax6, which itself is down-regulated by Shh from the ZLI in this area. Our results demonstrate that the combinatorial expression of Irx3 and Pax6 endows cells with the competence for cTh formation, whereas Shh-mediated down-regulation of Pax6 is required for rTh formation. Thus, thalamus induction and patterning depends both on a prepattern of Irx3 and Pax6 expression that establishes differential cellular competence and on Shh signaling from the ZLI organizer.