Our major accomplishments this year are in the following areas: 1) Role of hindbrain in inner ear development Using tissue extirpation and translocation techniques in chicken embryos, we show that the hindbrain confers the dorsoventral but not anteroposterior axial information to the developing inner ear. Sonic hedgehog emanated from either the floor plate or the notochord is a major factor in dictating ventral patterning of the inner ear. Furthermore, normal dorsal otic tissues will acquire ventral fates when juxtaposed to ventral hindbrain tissues in ovo, over riding any potential dorsalizing signals from other tissues. These results suggest that hindbrain is the major tissue responsible for dictating the dorsal-ventral axis of the inner ear. 2) Role of Gbx2 in inner ear development Gbx2 is a homeobox-containing transcription factor. The absence of Gbx2 function in mice results in inner ear defects that involve both vestibular and auditory components. These inner ear phenotypes are remarkably similar to those reported in kreisler mice, which have inner ear defects attributed to defects in the hindbrain. Our gene expression analyses suggest that activation of Gbx2 expression in inner ear is an important step downstream of hindbrain signaling.