LHX6 is a LIM-homeobox transcription factor expressed during embryogenesis; however, the molecular mechanisms regulating LHX6 transcriptional activities are unknown. LHX6 and the PITX2 homeodomain transcription factor have overlapping expression patterns during tooth and craniofacial development, and in this report, we demonstrate new transcriptional mechanisms for these factors. PITX2 and LHX6 are co-expressed in the oral and dental epithelium and epithelial cell lines. Lhx6 expression is increased in Pitx2c transgenic mice and decreased in Pitx2 null mice. PITX2 activates endogenous Lhx6 expression and the Lhx6 promoter, whereas LHX6 represses its promoter activity. Chromatin immunoprecipitation experiments reveal endogenous PITX2 binding to the Lhx6 promoter. LHX6 directly interacts with PITX2 to inhibit PITX2 transcriptional activities and activation of multiple promoters. Bimolecular fluorescence complementation assays reveal an LHX6·PITX2 nuclear interaction in living cells. LHX6 has a dominant repressive effect on the PITX2 synergistic activation with LEF-1 and β-catenin co-factors. Thus, LHX6 acts as a transcriptional repressor and represses the expression of several genes involved in odontogenesis. We have identified specific defects in incisor, molar, mandible, bone, and root development and late stage enamel formation in Lhx6 null mice. Amelogenin and ameloblastin expression is reduced and/or delayed in the Lhx6 null mice, potentially resulting from defects in dentin deposition and ameloblast differentiation. Our results demonstrate that LHX6 regulates cell proliferation in the cervical loop and promotes cell differentiation in the anterior region of the incisor. We demonstrate new molecular mechanisms for LHX6 and an interaction with PITX2 for normal craniofacial and tooth development.