Fgf8 and Tbx1 have been shown to interact in patterning the aortic arch, and both genes are required in formation and growth of the outflow tract of the heart. However, the nature of the interaction of the two genes is unclear. We have utilized a novel Tbx1(Fgf8) allele which drives Fgf8 expression in Tbx1-positive cells and an inducible Cre-LoxP recombination system to address the role of Fgf8 in Tbx1 positive cells in modulating cardiovascular development. Results support a requirement of Fgf8 in Tbx1 expressing cells to finely control patterning of the aortic arch and great arteries specifically during the pharyngeal arch artery remodeling process and indicate that the endoderm is the most likely site of this interaction. Furthermore, our data suggest that Fgf8 and Tbx1 play independent roles in regulating outflow tract development. This finding is clinically relevant since TBX1 is the candidate for DGS/VCFS, characterized clinically by variable expressivity and reduced penetrance of cardiovascular defects; Fgf8 gene variants may provide molecular clues to this variability.