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Differences in the growth and maturation of diverse forebrain tissues depend on region-specific transcriptional regulation. Individual transcription factors act simultaneously in multiple regions that develop very differently, raising questions about the extent to which their actions vary regionally. We found that the transcription factor Pax6 affects the transcriptomes and the balance between proliferation and differentiation in opposite directions in the diencephalon versus cerebral cortex. We tested several possible mechanisms to explain Pax6's tissue-specific actions and found that the presence of the transcription factor Foxg1 in the cortex but not in the diencephalon was most influential. We found that Foxg1 is responsible for many of the differences in cell cycle gene expression between the diencephalon and cortex and, in cortex lacking Foxg1, Pax6's action on the balance of proliferation versus differentiation becomes diencephalon like. Our findings reveal a mechanism for generating regional forebrain diversity in which one transcription factor completely reverses the actions of another., (Copyright © 2018 The Author(s). Published by Elsevier Inc. All rights reserved.)