This study describes the conserved nlz gene family whose members encode unusual zinc finger proteins. In the zebrafish neurectoderm, both nlz1 and the newly isolated nlz2 are expressed in the presumptive hindbrain and midbrain/hindbrain boundary, where expression of nlz1 is dependent on pax2a. In addition, nlz2 is uniquely expressed more anteriorly, in the presumptive midbrain and diencephalon. Overexpression of Nlz proteins during gastrula stages inhibits hindbrain development. In particular, ectopically expressed Nlz1 inhibits formation of future rhombomeres 2 and 3 (r2, r3), whereas neighboring r1 and r4 are not affected. Conversely, simultaneous reduction of Nlz1 and Nlz2 protein function by expression of antisense morpholino-modified oligomers leads to expansion of future r3 and r5, with associated loss of r4. These data indicate that one function of the nlz gene family is to specify or maintain r4 identity, and to limit r3 and r5 during hindbrain formation. Developmental Dynamics 229:835-846, 2004.