Otx genes play an important role in brain development. Previous mouse models suggested that the untranslated regions (UTRs) of Otx2 mRNA may contain regulatory element(s) required for its post-transcriptional control in epiblast and neuroectoderm. In order to study this, we have perturbed the 3′ UTR of Otx2 by inserting a small fragment of DNA from the λ phage. Otx2λ mutants exhibited proper gastrulation and normal patterning of the early anterior neural plate, but from 8.5 days post coitum they developed severe forebrain and midbrain abnormalities. OTX2 protein levels in Otx2λ mutants were heavily reduced in the epiblast, axial mesendoderm and anterior neuroectoderm but not in the visceral endoderm. At the molecular level, we found out that the ability of the Otx2λ mRNA to form efficient polyribosome complexes was impaired. Sequence analysis of the Otx2-3′ UTR revealed a 140 bp long element that is present only in vertebrate Otx2 genes and conserved in identity by over 80%. Our data provide experimental evidence that murine brain development requires accurate translational control of Otx2 mRNA in epiblast and neuronal progenitor cells. This leads us to hypothesise that this control might have important evolutionary implications.