Otx1 is a homeodomain protein required for axon refinement by layer 5 neurons in developing cerebral cortex. Otx1 localizes to the cytoplasm of progenitor cells in the rat ventricular zone, and remains cytoplasmic as neurons migrate and begin to differentiate. Nuclear translocation occurs during the first week of postnatal life, when layer 5 neurons begin pruning their long-distance axonal projections. Deletion analysis reveals that Otx1 is imported actively into cell nuclei, that the N-terminus of Otx1 is necessary for nuclear import, and that a putative nuclear localization sequence within this domain is sufficient to direct nuclear import in a variety of cell lines. In contrast, GFP-Otx1 fusion proteins that contain the N-terminus are retained in the cytoplasm of cortical progenitor cells, mimicking the distribution of Otx1 in vivo. These results suggest that ventricular cells actively sequester Otx1 in the cytoplasm, either by preventing nuclear import or by promoting a balance of export over import signals.