The diencephalon is the embryonic anlagen of the higher integration centers of the brain. Recent studies have elucidated how the cells in the rostral diencephalon acquire their regional identities. However, the understanding of the mechanisms under which the caudal diencephalon is formed is still limited. Here we focus on the role of Autotaxin (ATX), a lysophospholipid-generating exoenzyme, whose mRNA is detected in the caudal diencephalon. RNA interference against ATX altered the expression pattern of Pax6-regualted genes, Tcf4, Lim1, and En1, implying that ATX is required for the maintenance of the regional identity of the caudal diencephalon and the diencephalon-mesencephalon boundary (DMB). Furthermore, ATX-RNAi inhibited neuroepithelial cell proliferation on both sides of the DMB. We propose a dual role of ATX in chick brain development, in which ATX not only contributes to the formation of caudal diencephalon as a short-range signal, but also regulates the growth of mesencephalon as a long-range signal.