To achieve adequate organ development and size, cell proliferation and differentiation have to be tightly regulated and coordinated. The transcription factor Pax6 regulates patterning, neurogenesis and proliferation in forebrain development. The molecular basis of this regulation is not well understood. As the bipartite DNA-binding paired domain of Pax6 regulates forebrain development, we examined mice with point mutations in its individual DNA-binding subdomains PAI (Pax6(Leca4), N50K) and RED (Pax6(Leca2), R128C). This revealed distinct roles in regulating proliferation in the developing cerebral cortex, with the PAI and RED subdomain mutations reducing and increasing, respectively, the number of mitoses. Conversely, neurogenesis was affected only by the PAI subdomain mutation, phenocopying the neurogenic defects observed in full Pax6 mutants. Genome-wide expression profiling identified molecularly discrete signatures of Pax6(Leca4) and Pax6(Leca2) mutations. Comparison to Pax6 targets identified by chromatin immunoprecipitation led to the identification and functional characterization of distinct DNA motifs in the promoters of target genes dysregulated in the Pax6(Leca2) or Pax6(Leca4) mutants, further supporting the distinct regulatory functions of the DNA-binding subdomains. Thus, Pax6 achieves its key roles in the developing forebrain by utilizing particular subdomains to coordinate patterning, neurogenesis and proliferation simultaneously.