Organizing centers emit signaling molecules that specify different neuronal cell types at precise positions along the anterior-posterior (A-P) and dorsal-ventral (D-V) axes of neural tube during development. Here we report that reduction in Otx proteins near the alar-basal plate boundary (ABB) of murine midbrain resulted in a dorsal shift of Shh expression, and reduction in Otx proteins at the midbrain-hindbrain boundary (MHB) resulted in an anterior expansion of the Fgf8 domain. Our data thus indicate that an Otx dose-dependent repressive effect coordinates proper positioning of Shh and Fgf8 expression. Furthermore, this control is effective for conferring proper cell identity in the floor-plate region of midbrain and does not require an Otx2-specific property. We propose that this mechanism may provide both A-P and D-V positional information to neuronal precursors located within the midbrain.