The hindbrain region of the vertebrate central nervous system (CNS) presents a complex regionalisation. It consists of 7-8 distinct morphological segments called rhombomeres, each with a unique identity provided by combinations of transcription factors. One class of signalling molecules, retinoids, have been shown to be crucial for hindbrain patterning through direct trans-activation of Hox genes in the neuroectoderm. However, how this morphogen acts is not yet fully understood. Here, we show that the retinoid receptor antagonist AGN193109 causes a posterior hindbrain defect in Xenopus, comparable to that seen in other vertebrates. We show that this defect arises during gastrulation. Blocking endogenous retinoid activity during gastrulation causes downregulation of the most 3' Hox genes (paralogues 1-5) in gastrula neuroectoderm, but their initial activation in gastrula non-organiser mesoderm is unaffected. Similar results were obtained in avian embryos: Vitamin Adeficient quail embryos have defective expression of 3' Hox genes (i.e. Hoxb1, Hoxb4 ) in the neural tube, but their early expression in the primitive streak and emerging paraxial and lateral mesoderm is not affected. In Xenopus, depletion of retinoids from mesoderm by targeted injection of mRNAs for the retinoic acid catabolising enzyme xCYP26 and the cellular retinoic acid binding protein xCRABP blocks 3' Hox gene expression in the overlying neuroectoderm. We propose that the gastrula nonorganiser mesoderm and its later derivative, the paraxial mesoderm, is the source of a retinoid, which acts as a "transforming" (caudalising) signal for the future posterior hindbrain.