Cranial neural crest cells (crNCCs) migrate from the neural tube to the pharyngeal arches (PAs) of the developing embryo and, subsequently , differentiate into bone and connective tissue to form the mandible. Within the PAs, crNCCs respond to local signaling cues to partition into the proximo-distally oriented subdomains that convey positional information to these developing tissues. Here, we show that the distal-most of these subdomains, the distal cap, is marked by expression of the transcription factor Hand1 (H1) and gives rise to the ectomesenchymal derivatives of the lower incisors. We uncover a H1 enhancer sufficient to drive reporter gene expression within the crNCCs of the distal cap. We show that bone morphogenic protein (BMP) signaling and the transcription factor HAND2 (H2) syner-gistically regulate H1 distal cap expression. Furthermore, the homeodomain proteins distal-less homeobox 5 (DLX5) and DLX6 reciprocally inhibit BMP/H2-mediated H1 enhancer regulation. These findings provide insights into how multiple signaling pathways direct transcriptional outcomes that pattern the developing jaw. Bmp | DLX | HAND1 | cranial neural crest cells | development A fter migrating to specific locations within the developing embryo, neural crest cells (NCCs), a multipotent cell population originating from the dorsal lip of the neural tube, respond to local morphogenetic signaling cues to pattern and differentiate (1). Following migration to the pharyngeal arches (PAs), cranial NCCs (crNCCs) respond to endothelin 1 (EDN1) and bone mor-phogenic protein (BMP) signaling from surrounding pharyngeal epithelia to subdivide the PA ectomesenchyme into discrete proximo-distal domains (2). In the mandibular arch (MD1), these nested PA subdomains, characterized by the expression of DLX homeobox and/or HAND basic helix–loop–helix (bHLH) transcription factors, are integral to the development of specific jaw structures, including bone, tongue mesenchyme, and heterogeneous teeth (3). HAND factors regulate mandibular incisor development (4), whereas DLX proteins influence maxillary molar development (2). The mechanisms by which DLX-and HAND-dependent transcriptional programs establish proximo-distal PA subdomains are poorly understood. Indeed, the dearth of identified cis-regulatory elements active in postmigratory NCCs has hampered the elucidation of the gene regulatory networks that establish regional identity within the developing mandible. BMP and EDN1 signaling initially overlaps within the distal murine MD1, but by embryonic day (E)10.5, these signaling pathways become spatially segregated. The distal-most tip of the PAs, known as the distal cap, is transiently devoid of active EDN1 sig-naling. BMP signaling is ostensibly restricted to this distal cap by the localized expression of Bmp antagonists (3). Here, we provide evidence that DLX5 and DLX6 act as transcriptional repressors of BMP signaling specifically within the cranial PAs. We show that, within the crNCCs, the BMP-dependent transcription factors Smads, H2, and GATA2/3 provide positive transcriptional inputs that serve to counteract the activity of Dlx proteins, thereby relieving EDN1-meditated repression. Together, these findings integrate the communication between BMP and EDN1 signaling that establishes the distal cap of the mandible. Results The H1 Cre Lineage Gives Rise to the Lower Incisors, in a HAND Factor-Dependent Manner. H1 expression is confined to the distal cap ecto-mesenchyme (4, 5). H1 dimer mutants display noncell-autonomous craniofacial phenotypes outside of the distal cap (6). The H1 Cre knock-in allele provides a tool with which to interrogate cell-autonomous roles of Hand factors within the MD1 (7, 8). To examine the development of the H1 lineage relative to the developing incisors, we performed X-Gal staining of R26R lacZ/+ ;H1 Cre/+ embryos at E15.5. Consistent with H1 lacZ expression, the H1 lineage is restricted to the midline of the tongue and Meckel's cartilage within the developing jaw; however, the dental papilla (dp) of the man-dibular incisors, which exhibits undetectable H1 lacZ expression (4) (Fig. S1A) is derived from H1 Cre-marked cells (Fig. S1B). These findings suggest that Hand factors function cell-autonomously during early mandibular incisor development. Significance Within the developing mandible, proper specification and positioning of bone, tongue, and teeth are controlled by secreted morphogens. Among these morphogenetic cues, endothelin 1 (EDN1) and bone morphogenic proteins (BMPs) divide the nascent mandible into subdomains along a proximo-distal axis. The transcriptional mechanisms by which mandibular progenitor cells interpret morphogenetic signals to establish these subdomains are poorly understood. Here, we characterize a Hand1 enhancer that drives gene expression specifically within the distal-most of these subdomains, the distal cap. Our findings show that Bmp-dependent transcription factors provide positive transcriptional inputs that serve to counteract the repressive activity of EDN1-dependent transcription factors within the distal cap, thus integrating the communication between BMP and EDN1 signaling that patterns the mandible.