The Ciona forkhead/HNF-3beta gene (Ci-fkh) is expressed in the primary axial tissues of the developing tadpole, including the notochord, endoderm, and rudimentary floor plate of the CNS. In an effort to determine the basis for this complex pattern of expression we have conducted a detailed analysis of the Ci-fkh 5'-regulatory region. Different 5' sequences were attached to a lacZ reporter gene and analyzed in electroporated Ciona embryos. A short regulatory sequence (AS) located approximately 1.7 kb upstream of the transcribed region is shown to be essential for expression in all three axial tissues. The proximal 20 bp of the AS contains overlapping Snail repressor elements and a T-box motif. Deleting these sequences causes the loss of reporter gene expression in the endoderm, as well as expanded expression in the neural tube. These results suggest that a T-box gene such as Ci-VegTR activates Ci-fkh expression in the endoderm, while the Ci-Sna repressor excludes expression from the lateral ependymal cells and restricts the Ci-fkh pattern to the rudimentary floor plate in ventral regions of the neural tube. We also present evidence for Ci-fkh positive autofeedback, whereby the Ci-Fkh protein binds to critical activator sites within the Ci-fkh 5'-regulatory region and helps maintain high levels of expression. We discuss these results with respect to forkhead/HNF-3beta regulation in vertebrates.