Several molecules of the Fibroblast growth factor family have been implicated in the development of the vertebrate brain, but the effectors of these molecules remain largely unknown. Here we study Erm and Pea3, two ETS domain transcription factors, and show that their expression correlates closely with the domains of fgf8 and fgf3 expression. In situ hybridization analysis in wild-type and acerebellar (ace) mutant embryos defective for fgf8 demonstrates a requirement of Fgf8 for normal expression levels of erm and pea3 transcripts in and close to various domains of Fgf8 action, including the prospective midbrain-hindbrain region, the somites, the neural crest, the forebrain, and developing eyes. Morpholino-oligomer-assisted gene knock-down experiments targeted against fgf8 and fgf3 suggest that Fgf3 and Fgf8 are co-regulators of these genes in the early forebrain anlage. Furthermore, inhibition of Fgf signaling by overexpression of sprouty4 or application of the Fgf inhibitor SU5402 leads to a loss of all erm and pea3 expression domains. Conversely, ectopically provided fgf3 mRNA or implanted beads coated with Fgf8 elicit ectopic transcription of erm and pea3. Both activation and loss of transcripts can be observed within short time frames. We conclude that both the transcriptional onset and maintenance of these factors are tightly coupled to Fgf signaling and propose that erm and pea3 transcription is a direct readout of cells to Fgf levels. Given the knowledge that has accumulated on the posttranslational control of ETS domain factors and their combinatorial interactions with other transcription factors, we suggest that the close coupling of erm and pea3 transcription to Fgf signaling might serve to integrate Fgf signaling with other signals to establish refined patterns in embryonic development.