The division of the mammalian forebrain into distinct left and right hemispheres represents a critical step in neural development. Several signaling molecules including sonic hedgehog (SHH), fibroblast growth factor 8 (FGF8), and bone morphogenetic proteins (BMPs) have been implicated in dorsal midline development, and prior work suggests that the organizing centers from which these proteins are secreted mutually regulate one another during development. To explore the role of the ventral organizing center in the formation of two hemispheres, we assessed dorsal midline development in Shh mutant embryos and in wildtype embryos treated with the SHH signaling inhibitor HhAntag. Collectively, our findings demonstrate that SHH signaling plays an important role in maintaining the normal expression patterns of Fgf8 and Bmp4 in the developing forebrain. We further show that FGF8 can induce the expression of Zic2, which is normally expressed at the midline and is required in vivo for hemispheric cleavage, suggesting that FGF signaling may stimulate dorsal midline development by inducing Zic2 expression. © 2007 Wiley Periodicals, Inc. Develop Neurobiol, 2008