The mouse open brain (opb) and Sonic hedgehog (Shh) genes have opposing roles in neural patterning: opb is required for dorsal cell types and Shh is required for ventral cell types in the spinal cord. Here we show that opb acts downstream of Shh. Ventral cell types that are absent in Shh mutants, including the floor plate, are present in Shh opb double mutants. The organization of ventral cell types in Shh opb double mutants reveals that Shh-independent mechanisms can pattern the neural tube along its dorsal-ventral axis. We cloned opb by a map-based approach and found that it encodes Rab23, a member of the Rab family of vesicle transport proteins. The data indicate that dorsalizing signals activate transcription of Rab23 in order to silence the Shh pathway in dorsal neural cells.