The hypothalamus, which regulates fundamental aspects of physiological homeostasis and behavior, is a brain region that exhibits highly conserved anatomy across vertebrate species. Its development involves conserved basic mechanisms of induction and patterning, combined with a more plastic process of neuronal fate specification, to produce brain circuits that mediate physiology and behavior according to the needs of each species. Here, we review the factors involved in the induction, patterning and neuronal differentiation of the hypothalamus, highlighting recent evidence that illustrates how changes in Wnt/β-catenin signaling during development may lead to species-specific form and function of this important brain structure.