The conserved habenular nuclei function as a relay system connecting the forebrain with the brain stem. They play crucial roles in various cognitive behaviors by modulating cholinergic, dopaminergic and serotonergic activities. Despite the renewed interest in this conserved forebrain region because of its importance in regulating aversion and reward behaviors, the formation of the habenular nuclei during embryogenesis is poorly understood due to their small size and deep location in the brain, as well as the lack of known markers for habenular progenitors. In zebrafish, the bilateral habenular nuclei are subdivided into dorsal and ventral compartments, are particularly large and found on the dorsal surface of the brain, which facilitates the study of their development.Here we examine the expression of a homeodomain transcription factor, dbx1b, and its potential to serve as an early molecular marker of dorsal habenular progenitors. Detailed spatiotemporal expression profiles demonstrate that the expression domain of dbx1b correlates with the presumptive habenular region, and dbx1b-expressing cells are proliferative along the ventricle. A lineage-tracing experiment using the Cre-lox system confirms that all or almost all dorsal habenular neurons are derived from dbx1b-expressing cells. In addition, mutant analysis and pharmacological treatments demonstrate that both initiation and maintenance of dbx1b expression requires precise regulation by fibroblast growth factor (FGF) signaling.We provide clear evidence in support of dbx1b marking the progenitor populations that give rise to the dorsal habenulae. In addition, the expression of dbx1b in the dorsal diencephalon is tightly controlled by FGF signaling.