The coordination of anterior-posterior (AP) and dorsal-ventral (DV) patterning of the mesencephalon (mes) and rhombomere 1 (r1) is instrumental for the development of three distinct brain structures: the tectum and cerebellum dorsally and the tegmentum ventrally. Patterning of the mes/r1 is primarily mediated by signaling molecules secreted from two organizers: sonic hedgehog (Shh) from the floor plate (DV) and Fgf8 from the isthmus (AP). Gli3, a zinc-finger transcription factor in the Shh signaling pathway, has been implicated in regulating Fgf8 expression and is therefore a potential candidate for coordinating the action of the two organizers. By inactivating mouse Gli3 at successive embryonic time points in vivo, we uncovered the extent and the underlying mechanism of Gli3 function in the mes/r1. We demonstrate that before E9.0, Gli3 is required for establishing a distinct posterior tectum, isthmus and cerebellum, but does not play a role in the development of the tegmentum. Between E9.0 and E11.0, Gli3 continues to be required for isthmus and cerebellum development, but primarily for defining the cerebellar foliation pattern. We show that Gli3 regulates patterning of the isthmus and cerebellar anlage by confining Fgf8 expression to the isthmus, and attenuates growth of dorsal r1 (before E11.0) and the dorsal mes and isthmus (beyond E11.0) through regulation of cell proliferation and viability. In conclusion, our results show that Gli3 is essential for the coordinated three-dimensional patterning and growth of the dorsal mes/r1. KEY WORDS: Anterior-posterior patterning, Dorsal-ventral patterning, Isthmic organizer, Mid/hindbrain, Mouse