We have identified a transcription factor specifically expressed in the developing vertebrate eye. We named this gene vax2 because of the high degree of sequence similarity to the recently described vax1. Both in the human and mouse genomes, vax2 is localized in the vicinity of the emx1 gene. This mapping assignment, together with the previously reported colocalization of Vax1 and Emx2 in mouse, indicates that the vax and the emx genes may be organized in clusters. vax2 has a remarkable expression domain confined to the ventral portion of the prospective neural retina in mouse, human, and Xenopus. The overexpression of either the frog Xvax2 or the human VAX2 in Xenopus embryos leads to an aberrant eye phenotype and, in particular, determines a ventralizing effect on the developing eye. The expression domain of the transcription factor Xpax2, normally confined to the ventral developing retina, extends to the dorsal region of the retina after overexpression of vax2. On the other hand, the expression of Xvent2, a molecular marker of the dorsal retina, is strongly reduced. Furthermore, vax2 overexpression induces a striking expansion of the optic stalk, a structure deriving from the ventralmost region of the eye vesicle. Altogether, these data indicate that vax2 plays a crucial role in eye development and, in particular, in the specification of the ventral optic vesicle.