Cleft palate is one of the most common birth defects in humans. Whereas gene knockout studies in mice have shown that both the Osr2 and Pax9 transcription factors are essential regulators of palatogenesis, little is known about the molecular mechanisms involving these transcription factors in palate development. We report here that Pax9 plays a crucial role in patterning the anterior-posterior axis and outgrowth of the developing palatal shelves. We found that tissue-specific deletion of Pax9 in the palatal mesenchyme affected Shh expression in palatal epithelial cells, indicating that Pax9 plays a crucial role in the mesenchyme-epithelium interactions during palate development. We found that expression of the Bmp4, Fgf10, Msx1 and Osr2 genes is significantly downregulated in the developing palatal mesenchyme in Pax9 mutant embryos. Remarkably, restoration of Osr2 expression in the early palatal mesenchyme through a Pax9Osr2KI allele rescued posterior palate morphogenesis in the absence of Pax9 protein function. Our data indicate that Pax9 regulates a molecular network involving the Bmp4, Fgf10, Shh and Osr2 pathways to control palatal shelf patterning and morphogenesis.