Hox gene products are key players in establishing positional identity along the anteroposterior (AP) axis. In vertebrates, gain or loss of Hox expression along the AP axis often leads to inappropriate morphogenesis, typically manifesting as homeotic transformations that affect the vertebrae and/or hindbrain. Various signalling pathways are known to impact on Hox expression,including the retinoid signalling pathway. Exogenous retinoic acid (RA),disruption of enzymes involved in maintaining normal embryonic RA distribution or mutation of the retinoid receptors (RARs and RXRs) can all impact on Hox expression with concomitant effects on AP patterning.Several Hox loci have well characterized RA response elements (RAREs),which have been shown to regulate functionally relevant Hox expression in the neurectoderm. A similar crucial function for any RARE in mesodermal Hox expression has, however, not been documented. The means by which RA regulates mesodermal Hox expression could therefore be either through an undocumented direct mechanism or through an intermediary; these mechanisms are not necessarily exclusive. In this regard, we have found that Cdx1 may serve as such an intermediary. Cdx1 encodes a homeobox transcription factor that is crucial for normal somitic expression of several Hox genes, and is regulated by retinoid signalling in vivo and in vitro likely through an atypical RARE in the proximal promoter. In order to more fully understand the relationship between retinoid signalling, Cdx1 expression and AP patterning, we have derived mice in which the RARE has been functionally inactivated. These RARE-null mutants exhibit reduced expression of Cdx1 at all stages examined, vertebral homeotic transformations and altered Hox gene expression which correlates with certain of the defects seen in Cdx1-null offspring. These findings are consistent with a pivotal role for retinoid signalling in governing a subset of expression of Cdx1 crucial for normal vertebral patterning.