Proposed model for the function of RPTPλ at the MHB. The MHB (dashed vertical line) is located at the border between the expression domains of Otx2 (rostral) and Gbx2 (caudal). Once the MHB is established during early somitogenesis, Fgf8, Wnt1, En2, Pax2, and Pax5 function in an interdependent, positive feedback loop, which is necessary for organizer maintenance. RPTPλ expression is induced by Fgf8 at a signaling threshold that differs from that required for Wnt1 induction, resulting in a band of RPTPλ expression anterior to the Wnt1 domain. RPTPλ counteracts Fgf8-mediated transcriptional activation of Wnt1, which constrains the Wnt1 domain to its typical tight ring anterior to the Otx2-Gbx2 boundary. Presumably, as a consequence of the high degree of homology between the juxtamembrane domain of RPTPλ with cadherins, RPTPλ can bind to and sequester β-catenin and thereby negatively influence canonical Wnt signaling.