TG-interacting factor (TGIF) is a homeodomain-containing protein and functions as a transcriptional repressor within the TGF-beta and retinoic acid signaling pathways. Heterozygous mutations of TGIF have been found in patients with holoprosencephaly (HPE), which is the most common congenital brain malformation in humans. However, targeted null deletions of the entire Tgif gene in mice surprisingly revealed no apparent brain defects. We report here that deletion of the third exon of Tgif gene resulted in a defined spectrum of brain developmental defects including exencephaly, microcephaly, HPE, and abnormalities in embryonic brain ventricle formation and cleavage. These defects could be detected in mice both heterozygous and homozygous for the targeted Tgif deletion. Moreover, expression of dorsal-ventral patterning genes including Shh, Pax6 and Nkx2.2 was altered. The ventricular neuroepithelium exhibited focalized increase of cell proliferation rate and resultant tissue expansion. The incidence of brain abnormalities within the mutant mice was dependent on its genetic background, suggesting that additional genetic modifiers functionally interact with Tgif during embryonic brain development. The intragenic Tgif deletion mouse, therefore, would serve as a useful model that can be used to unravel the genetic complexity implicated in the pathogenesis of HPE.