Heterozygous mutations in the homeobox gene, PITX2, result in ocular anterior segment defects and a high incidence of early-onset glaucoma. Pitx2 is expressed in both the neural crest and the mesoderm-derived precursors of the periocular mesenchyme. Complete loss of function in mice results in agenesis or severe disruption of periocular mesenchyme structures and extrinsic defects in early optic nerve development. However, the specific requirements for Pitx2 in neural crest versus mesoderm could not be determined using these mice, and only roles in the initial stages of eye development could be assessed due to early embryonic lethality. To determine the specific roles of Pitx2 in the neural crest precursor pool, we generated neural crest-specific Pitx2 knockout mice (Pitx2-ncko). Because Pitx2-nkco mice are viable, we also analyzed gene function in later eye development. Pitx2 is intrinsically required in neural crest for specification of corneal endothelium, corneal stroma and the sclera. Pitx2 function in neural crest is also required for normal development of ocular blood vessels. Pitx2-ncko mice exhibit a unique optic nerve phenotype in which the eyes are progressively displaced towards the midline until they are directly attached to the ventral hypothalamus. As Pitx2 is not expressed in the optic stalk, an essential function of PITX2 protein in neural crest is to regulate an extrinsic factor(s) required for development of the optic nerve. We propose a revised model of optic nerve development and new mechanisms that may underlie the etiology of glaucoma in Axenfeld-Rieger patients.