During development of the anterior eye segment, cells that originate from the surface epithelium or the neuroepithelium need to interact with mesenchymal cells, which predominantly originate from the neural crest. Failures of proper interaction result in a complex of developmental disorders such Peters' anomaly, Axenfeld–Rieger's syndrome or aniridia. Here we review the role of transcription factors that have been identified to be involved in the coordination of anterior eye development. Among these factors is PAX6, which is active in both epithelial and mesenchymal cells during ocular development, albeit at different doses and times. We propose that PAX6 is a key element that synchronizes the complex interaction of cell types of different origin, which are all needed for proper morphogenesis of the anterior eye. We discuss several molecular mechanisms that might explain the effects of haploinsufficiency of PAX6 and other transcription factors, and the broad variation of the resulting phenotypes. BioEssays 26:374–386, 2004. © 2004 Wiley Periodicals, Inc.