Pax‐6, a transcription regulatory factor, has been demonstrated to play important roles in eye, nose, and brain development by analyzing mice, rats, and humans with a Pax‐6 gene mutation. We examined the role of Pax‐6 with special attention to the formation of efferent and afferent pathways of the cerebral cortex by using the rat Small eye (rSey²), which has a mutation in the Pax‐6 gene. In rSey²/rSey² fetuses, cortical efferent axons develop with normal trajectory, at least within the cortical anlage, when examined with immunohistochemistry of the neuronal cell adhesion molecule TAG‐1 and 1,1′‐dioctadecyl‐3,3,3′,3′‐tetramethyl‐indocarbocyanine perchlorate (DiI) labeling from the cortical surface. A remarkable disorder was found in the trajectory of dorsal thalamic axons by immunostaining of the neurofilament and the neural cell adhesion molecule L1 and DiI labeling from the dorsal thalamus. In normal rat fetuses, dorsal thalamic axons curved laterally in the ventral thalamus without invading a Pax‐6‐immunoreactive cell cluster in the ventral part of the ventral thalamus. These axons then coursed up to the cortical anlage, passing just dorsal to another Pax‐6‐immunoreactive cell cluster in the amygdaloid region. In contrast, in rSey²/rSey² fetuses, dorsal thalamic axons extended downward to converge in the ventrolateral corner of the ventral thalamus and fanned out in the amygdaloid region without reaching the cortical anlage. These results suggest that Pax‐6‐expressing cell clusters along the thalamocortical pathway (ventral part of the ventral thalamus and amygdala) are responsible for the determination of the axonal pathfinding of the thalamocortical pathway. J. Comp. Neurol. 408:147–160, 1999. © 1999 Wiley‐Liss, Inc.