Within the Hoxb homeobox gene complex, Hoxb-1 is the earliest member expressed in the mesoderm and neuroectoderm of primitive streak and presomite embryos, preceding rhombomere-restricted expression in the hindbrain. Ectopic exposure of embryos to retinoic acid alters spatial aspects of Hox gene expression patterns. However, the role of retinoids in regulating these genes during normal development is unclear. We have now identified two enhancers, 3' of the mouse Hoxb-1 gene, which together reconstruct the early endogenous expression pattern and mediate the early ectopic response to retinoic acid. Furthermore, these regions are functionally conserved in both chicken and pufferfish (Fugu rubripes) Hoxb-1 genes. The enhancer that controls the retinoic acid response, and regulates expression predominantly in neuroectoderm, contains a retinoic acid response element (RARE). Point mutations in the RARE abolish expression in neuroectoderm. Therefore, this RARE is not only involved in the ectopic response to retinoic acid, but is also essential for establishing aspects of the early Hoxb-1 expression pattern.