SUMMARYThe infundibulum links the nervous and endocrine systems, serving as a crucial integrating centre for body homeostasis. Here we describe that the chick infundibulum derives from two subsets of anterior ventral midline cells. One set remains at the ventral midline and forms the posterior-ventral infundibulum. A second set migrates laterally, forming a collar around the midline. We show that collar cells are composed of Fgf3 + SOX3 + proliferating progenitors, the induction of which is SHH dependent, but the maintenance of which requires FGF signalling. Collar cells proliferate late into embryogenesis, can generate neurospheres that passage extensively, and differentiate to distinct fates, including hypothalamic neuronal fates and Fgf10 + anterior-dorsal infundibular cells. Together, our study shows that a subset of anterior floor plate-like cells gives rise to Fgf3 + SOX3 + progenitor cells, demonstrates a dual origin of infundibular cells and reveals a crucial role for FGF signalling in governing extended infundibular growth.