The Pax6 encodes a highly conserved transcriptional regulator that contains two DNA binding domains, the paired domain (PD) and homeodomain (HD). In mammals, Pax6 is widely expressed in a complex spatiotemporal pattern during the development of the eye, olfactory bulbs and central nervous system and plays important roles in pattern formation, cell fate determination and cell cycle progression in these regions. Normal development requires Pax6 to be present in certain cells with correct levels, which implies that Pax6 expression is tightly controlled and that different levels need to be maintained across different regions as they develop. To gain better insight into the regulatory mechanisms of Pax6 expression, a series of tauGFP-Pax6 transgenic reporter mouse lines was previously generated in which the expression of tauGFP is under the control of putative Pax6 regulatory elements. Here, I have characterized the functional importance these regulatory elements by comparing the pattern of tauGFP expression with endogenous Pax6 expression in transgenic mice containing either complete or truncated versions of the reporter. I showed that the expression of tauGFP reporter exhibits the known Pax6 expression pattern in forebrain and eye, except for some minor discrepancy within the telecephalon. The loss of tauGFP expression within the eye and thalamus was observed in transgenic lines carrying truncated reporter sequences lacking the downstream regulatory region (DDR) of Pax6. Analysis of the pattern of GFP reporter expression in transgenic lines that vary in the extent of their putative Pax6 regulatory elements revealed the functional significance of these elements and also implied the existence of unknown distal regulatory elements, outside of the reporter sequences, which control Pax6 expression in the telecephalon. I went on to study a Pax6-dependent signaling pathway through which Pax6 controls progenitor cell proliferation in the developing telencephalon. Comparison of cell cycle parameters between Pax6+/+ and Pax6sey/sey progenitors suggested that correct levels of Pax6 are crucial in regulating progenitor cell proliferation. To address the possible molecular basis of the cell cycle defect observed in Pax6sey/sey embryos, the expression of a number of cell cycle genes was analyzed by qRT-PCR in the lateral cortex of Pax6+/+ and Pax6sey/sey embryos, which confirmed the significantly altered expression levels of these genes. Of them, Cdk6 was further identified as a direct target of Pax6 and the interaction of putative binding sites with Pax6 protein was confirmed by EMSA in vitro and by qChIP in vivo. In addition, the functional role of these Pax6 binding sites, through which Pax6 represses the transcription of Cdk6, was further evaluated by luciferase assays. Activation of Cdk6 is required for pRb phosphorylation as well as induction of the pRB/E2F pathway, and in turn promotes the G1-S cell-cycle transition. An increase in pRb phosphorylation accompanied by changes in pRb subcellular distribution and up-regulation of E2F downstream targets were observed in the cortex of Pax6sey/sey embryos. In contrast, a reduction of Cdk6 expression and pRb phosphorylation was found in HEK293 cells overexpressing Pax6. Collectively, these findings provided new insight into the molecular mechanism of Pax6-dependent regulation of progenitor cell proliferation in the developing telecephalon.