Network model summarizing observed regulation events. Zic1 controls expression of cyc and cyp26a1. Cyc controls shh, which regulates transcription of its target genes vax1 (optic stalk), pax2 (optic stalk), and vax2 (optic stalk, ventral retina). Cyp26a1 maintains RA signaling at low levels during early forebrain development. In Zic1 morphants, cyp26a1 and cyc expression is down-regulated. Nodal, Hedgehog, and FGF signaling is hence reduced in the forebrain, and RA signaling is increased. Vax1 expression is lost. Elevated RA signaling expands the pax2 expression domain independently of Hedgehog signaling into the retina. Vax2 expression is reduced to a most proximal domain, as elevated RA signaling cannot compensate reduced Hedgehog signaling. Pax6, tbx5, and radar expression is repressed due to elevated RA signaling. (DR) Dorsal retina; (VR) ventral retina; (OS) optic stalk.