The Zic family of zinc-finger proteins plays a crucial role in neural development. Zic genes are vertebrate homologs of odd-paired, the Drosophila pair-rule gene. Their gene products have zinc-finger domains similar to those of Gli proteins, which act as transcriptional regulators in hedgehog signaling. Recent studies of human, mouse, frog, fish and ascidian Zic homologs have provided evidence that Zic genes are involved in a variety of developmental processes, including neurogenesis, myogenesis, skeletal patterning, and left-right axis establishment. Zic genes appear to have multiple roles in neural development. They control the initial phase during which ectoderm differentiates into neuroectoderm, and they may act as bridges between secreted neural tissue induction signals and the basic-helix-loop-helix class of neurogenesis-inducing transcriptional regulatory factors. Studies of loss-of-function mutations with differing Zic gene subtypes show that the Zic family of genes controls the process of neurulation. Mutations result in neural tube defects, which are seen at different rostrocaudal levels depending on which Zic gene subtype has been affected. Development of holoprosencephaly, forebrain anomalies, and cerebellar dysgenesis indicate that region-specific morphogenesis of the CNS is also controlled by Zic genes. The underlying molecular actions of Zic gene products, which allow them to control development, remain a mystery. Recent molecular characterization has shown that Zic proteins are able to bind Gli-binding DNA sequences in a sequence-specific manner, but with lower affinity than Gli proteins. Zic proteins also can activate transcription from several promoters. Furthermore, Zic and Gli proteins interact physically via their zinc-finger domains, raising the possibility that Zic proteins can act as transcriptional cofactors and modulate the hedgehog-signaling pathway. Clarification of the specific cooperating factors is therefore required in each case. Other evidence also suggests that Zic proteins can inhibit neuronal differentiation by activating Notch signals. This association might be is a clue toward understanding of the multifunctional property of Zic proteins because Notch signaling also is implicated in the control of several developmental processes.