After activation in mesoderm and neuroectoderm, expression of the Hoxb-1 gene is progressively restricted to rhombomere (r) 4 in the hindbrain. Analysis of the chick and mouse Hoxb-1 genes identified positive and negative regulatory regions that cooperate to mediate segment-restricted expression during rhombomere formation. An enhancer generates expression extending into r3 and r5, and a repressor limits this domain to r4. The repressor contains a conserved retinoic acid response element, point mutations in which allow expression to spread into adjacent rhombomeres. Retinoids and their nuclear receptors may therefore participate in sharpening segment-restricted expression of Hoxb-1 during rhombomere boundary formation.