During embryogenesis, the dorsal roof plate and the ventral floor plate (FP) act as organizing centers to pattern the developing neural tube. Organizer-secreted morphogens provide signals that are interpreted via the graded expression of transcription factors. These factors establish a combinatorial code, which subsequently determines the fate of neuronal progenitors along the dorsoventral axis. To further separate the fates and promote distinct identities of the neural progenitors, mutual repression takes place among transcription factors expressed in progenitors situated along the dorsoventral axis. The molecular mechanisms acting in the developing spinal cord and underlying the segregation of the progenitor pool containing cells with a mixed FP/p3 fate into separate FP cells and V3 neurons are not fully understood. Using in vivo ectopic expression in chick, we found that Nato3 induces ectopic Foxa2-positive cells and indirectly downregulates Nkx2.2 expression. To examine the role of Nato3 in the FP, Foxa2-Nato3 signaling was blocked in Nato3 null mice and to a greater extent in Nato3 null/Foxa2 heterozygous bigenic mutants. Complementary to the findings obtained by gain of function in chick, the loss of function in mouse indicated that the segregation of the FP/p3 population into its derivatives was interrupted. Together, the data suggest that Nato3 is a novel determinant factor regulating the segregation of the FP and p3 identities, which is an essential step for establishing a definitive FP fate in the embryonic spinal cord.