The major goal of this application is to elucidate the molecular events that control the expression of the signaling molecule Sonic hedgehog (Shh) in the ventral diencephalon and within the zona limitans intrathalamica (zli). In addition to its well-characterized role in ventral patterning throughout the neural tube, genetic studies suggest that Shh in the zli influences antero-posterior (A/P) growth and patterning of the diencephalon. The ability to manipulate Shh signaling in the ventral diencephalon and zli individually would facilitate the analysis of their role(s) in thalamic development. This application will therefore focus on the mechanisms regulating Shh expression in these two diencephalic domains. First, in ovo and in vitro manipulations of chick forebrain will be used to define tissue sources of signals upstream of Shh expression and to identify candidate molecules. Second, the molecular events that regulate Shh expression will be examined in chick, initially focusing on the roles of two extrinsic inductive signals, BMP2 and Nodal. Third, enhancer elements regulating Shh expression in the ventral diencephalon and zli will be identified in chick explant and transgenic mice. Finally, the role of Shh in zli maturation and diencephalic patterning will be analyzed in conditional knockouts in mice. These studies are intended to identify some of the steps upstream of Shh expression in the diencephalon and thus facilitate the analysis of the individual contributions of signals from the ventral diencephalon and zli to regionalization of the diencephalon. The adult thalamus, the main integration center of the brain, is derived from the diencephalon. Defining the molecular steps that control the development of this structure may therefore provide insight into the formation of neuronal circuitry in the forebrain and the faults in the system that can lead to neurological disease. Furthermore, knowledge of the precise combination of signals required to specify a particular part of the brain may provide insights into the design of new treatment strategies. As a new investigator, these studies will serve as the basis for a traditional research grant application in the future.