The mouse homeobox gene, Gbx2, is expressed in discreet domains in the neural tube and plays a key role in forebrain and hindbrain development. Previous studies have demonstrated that mutual inhibition between Gbx2 and Otx2, which are respectively expressed in the anterior and posterior parts of the neural plate, positions the prospective midbrain–hindbrain junction. We describe here a conditional Gbx2 gain-of-function transgenic mouse line, Gbx2-GOF, which expresses Gbx2 and red fluorescence protein, mCherry, upon Cre-mediated recombination. In the absence of Cre, β-galactosidase is broadly expressed in mouse embryos and adult brains carrying the transgene. By combining Gbx2-GOF and En1Cre knock-in allele, we activated expression of Gbx2 and mCherry throughout the mesencephalon (mes) and rhombomere 1 (r1). The ectopic expression of Gbx2 causes an anterior shift of the mes/r1 junction at embryonic day 10.5. Interestingly, we found that persistent expression of Gbx2 throughout the mes/r1 region largely abolishes expression of the isthmic organizer gene Fgf8, leading to deletion of the midbrain and cerebellum at later stages. Our data suggest that the juxtaposition of the expression domains of Gbx2 and Otx2 within the mes/r1 area is essential for the maintenance of Fgf8 expression. Furthermore, the Gbx2-GOF transgenic line is suitable for functional study of Gbx2 during development. genesis 47:667–673, 2009. © 2009 Wiley-Liss, Inc.