The dorsal midline structure is critical for patterning the developing central nervous system (CNS). We show here that Zfp423/OAZ, a multiple zinc-finger transcription factor involved in both OE/EBF and BMP-signaling pathways, is required for the proper formation of forebrain and hindbrain midline structures. During embryogenesis, OAZ is highly expressed at the dorsal neuroepithelium flanking the roof plate. OAZ-deficient mice are ataxic, attributed to the reduction of the cerebellar vermis and some regions of the hemispheres. Characterization of postnatal cerebellar development shows defects in Purkinje cell differentiation and granule cell proliferation. In the forebrain, dorsal telencephalic commissural neurons project axons, but these axons fail to cross the midline and midline glial cells are abnormally distributed. Moreover, there are malformations in midline structures including the septum, thalamus and hypothalamus, suggesting a pivotal role of OAZ in CNS midline patterning.