TTF-1/NKX2.1, also known as T/EBP, is a homeodomain-containing gene involved in the organogenesis of the thyroid gland, lung and ventral forebrain. We have already reported that in 3T3 cells, TTF-1/NKX2.1 up-regulates the transcription of nestin, an intermediate filament protein expressed in multipotent neuroepithelial cells, by direct DNA-binding to a HRE/CRE-like site (NestBS) within a CNS-specific enhancer. Here, we demonstrate that TTF-1/NKX2.1 is co-expressed with nestin in the embryonal forebrain. We also performed a transgenic mouse embryo analysis in which NestBS was replaced by the canonical TTF-1/NKX2.1 consensus DNA-binding site (as identified in many thyroid- and lung-specific genes and very divergent from NestBS) or a random mutation. We observed beta-galactosidase expression in forebrain regions where TTF-1/NKX2.1 is expressed in wild-type embryos, and -to a minor extent- in rostralmost telencephalic regions and thalamus, whereas no beta-galactosidase expression was detected in forebrains of embryos bearing the random mutation. These data show that TTF-1/NKX2.1 regulates the transcription of the nestin gene in vivo through the NestBS site, suggesting that nestin might be at least one of the effectors of TTF-1/NKX2.1 during forebrain development. Finally, we have shown that the transactivating effect of TTF-1/NKX2.1 on the CNS-specific enhancer is unaffected by Retinoic Acid Receptor-alpha.