Otx2 is a paired-class homeobox gene, and its functions in anterior visceral endoderm and/or anterior mesendoderm have been suggested to be vital for head development in mammals. Several transcription factors are expressed in these tissues, and mutant mice analyses have suggested the interactions of the Otx2 gene cascade with the Lim1 or HNF-3 beta cascade. Here we show that OTX2 directly associates with LIM1 and HNF-S beta; OTX2 binds to the LIM1 homeodomain (HD) with its C-terminal region, whereas both HD and C-terminal regions of OTX2 bind to the HNF-S beta fork head domain or OTX2 HD, The luciferase assay with the P3C sequence, a specific DNA binding sequence for paired-class homeobox genes, has demonstrated that LIM1 enhances, but HNF-3 beta represses, OTX2-directed gene expression. Direct interactions of OTX2 with LIM1 or HNF-S beta may play important roles in anterior visceral endoderm and/or anterior mesendoderm to constitute transcriptional regulatory networks for head development.