The vertebrate Lhx2 is a member of the LIM homeobox family of transcription factors. It is essential for the normal development of the forebrain, eye, olfactory system and liver as well for the differentiation of lymphoid cells. However, despite the highly restricted spatio-temporal expression pattern of Lhx2, nothing is known about its transcriptional regulation. In mammals and chicken, Crb2, Dennd1a and Lhx2 constitute a conserved linkage block, while the intervening Dennd1a is lost in the fugu Lhx2 locus. To identify functional enhancers of Lhx2, we predicted conserved noncoding elements (CNEs) in the human, mouse and fugu Crb2-Lhx2 loci and assayed their function in transgenic mouse at E11.5. Four of the eight CNE constructs tested functioned as tissue-specific enhancers in specific regions of the central nervous system and the dorsal root ganglia (DRG), recapitulating partial and overlapping expression patterns of Lhx2 and Crb2 genes. There was considerable overlap in the expression domains of the CNEs, which suggests that the CNEs are either redundant enhancers or regulating different genes in the locus. Using a large set of CNEs (810 CNEs) associated with transcription factor-encoding genes that express predominantly in the central nervous system, we predicted four over-represented 8-mer motifs that are likely to be associated with expression in the central nervous system. Mutation of one of them in a CNE that drove reporter expression in the neural tube and DRG abolished expression in both domains indicating that this motif is essential for expression in these domains. The failure of the four functional enhancers to recapitulate the complete expression pattern of Lhx2 at E11.5 indicates that there must be other Lhx2 enhancers that are either located outside the region investigated or divergent in mammals and fishes. Other approaches such as sequence comparison between multiple mammals are required to identify and characterize such enhancers.