During development, the structure of the telencephalon is dramatically transformed by region-specific proliferation and differentiation of neuroepithelial cells. To understand mechanisms of morphogenesis in the telencephalon, a search was made for genes expressed in a region-specific manner in the dorsal telencephalon of embryonic rats. Dorso-lateral and dorso-medial portions of the telencephalon were taken from rat fetuses on embryonic day (E) 13. Genes expressed in each portion were compared by a modified differential display method. Among more than 4000 cDNA fragments, four fragments termed M1, M1', M2 and M3 were found only after amplification of cDNAs derived from the dorso-medial portion of the telencephalon. Nucleotide sequence and Northern blot analyses showed that M1 and M1' were identical and that M2 and M3 were related genes. In situ hybridization revealed that M1 was expressed in a restricted portion of the hippocampal rudiment with a sharp boundary. M2 and M3 were expressed in the hippocampal rudiment with a more diffuse boundary than that of M1. Expression of M2 and M3 was also found in the most anterior part of the medial diencephalon with a caudal extension along the dorsal midline. These results suggest that at least two types of molecular specification occur in the dorso-medial telencephalon, contributing to the construction of the hippocampal elements during early stages of development.