The isthmic organizer, which is located at the midbrain-hindbrain boundary, plays an essential role in development of the midbrain and anterior hindbrain. It has been shown that homeobox genes regulate establishment of the isthmic organizer, but the mechanism by which the organizer is maintained is not well understood. Here, we found that, in mice doubly mutant for the basic helix-loop-helix genes Hes1 and Hes3, the midbrain and anterior hindbrain structures are missing without any significant cell death. In these mutants, the isthmic organizer cells prematurely differentiate into neurons and terminate expression of secreting molecules such as Fgf8 and Wnt1 and the paired box genes Pax2/5, all of which are essential for the isthmic organizer function. These results indicate that Hes1 and Hes3 prevent premature differentiation and maintain the organizer activity of the isthmic cells, thereby regulating the development of the midbrain and anterior hindbrain.