Craniofacial development is severely affected by null mutations in Foxc1, indicating a multifunctional role for Foxc1 in ocular, maxilla and mandible, skull and facial gland development. To delineate signaling pathways in which Foxc1 is involved we compared the transcriptomes of whole heads of Foxc1+/+ and Foxc1-/- embryos using a candidate cDNA array comprising genes expressed in the head mesenchyme and ocular region, and a 7K oligo array. Absence of Foxc1 led to downregulation of Stat1 and Galnt4, and upregulation of Tgf beta1i4 at embryonic day 13.5 in the developing head mesenchyme. Comparative analyses revealed differences in the expression pattern of Tgf beta1i4 in the head mesenchyme of Foxc1-/- and Foxc1+/+ embryos. In the ocular regions of Foxc1-/- embryos, Tgf beta1i4 was expressed in higher levels in the conjunctival epithelium and in the condensing mesenchyme on the nasal aspect of the developing eye while in wild-type embryos more intense expression was seen in the mesenchyme on the temporal aspect of the eye. Such data indicate that Foxc1 regulation of Tgf beta1i4 is complex and may be cell-type dependent. Analysis of the regulation of Tgf beta1i4 by Foxc1 in a more homogenous cell population, mesenchymal cells isolated from the periocular region revealed that, in these cells, Foxc1 negatively regulated Tgf beta1i4 expression, presumably via secreted factors such as TGF-beta1. Since Foxc1 expression is essential for normal craniofacial development, it is possible that its downstream targets play a role in the development of the phenotypes associated with null mutations in Foxc1.