The transcription factor Gli3 is important for brain and limb development. Mice homozygous for a mutation in Gli3 (Gli3Xt/Xt) have severe abnormalities of telencephalic development and previous studies have suggested that aberrant cell death may contribute to the Gli3Xt/Xt phenotype. We demonstrate that telencephalic cells from embryonic Gli3Xt/Xt embryos survive better and are more resistant to death induced by cytosine arabinoside, a nucleoside analogue that induces death in neuronal progenitors and neurons, than are control counterparts in vitro. Culture medium conditioned by Gli3Xt/Xt cells is more effective at enhancing the viability of control telencephalic cells than medium conditioned by control cells, indicating that Gli3Xt/Xt cells release a factor or factors which enhance telencephalic cell viability. Gli3Xt/Xt cells are also more sensitive to released factors present in conditioned media. These data suggest that Gli3 plays both cell-autonomous and cell-nonautonomous roles in mediating telencephalic cell viability.