Neuronal differentiation Is regulated by both positive and negative regulat
ory factors; however, precisely how these factors interact to regulate reti
nogenesis Is still unclear. We have examined the ability of the Notch pathw
ay to modulate the function of the basic helix-loop-helix factor Xath5. Ove
rexpression of Xath5 by RNA injection into cleavage-stage blastomeres promo
tes ectopic neurogenesis at neural plate stages and ganglion cell different
iation in the developing retina. We found that these activities of Xath5 co
uld be inhibited by coexpression of activated Notch. Notch inhibition of Xa
th5 function was reversed by coexpression with the zinc finger protein X-My
T1. The Notch effector enhancer-of-split related 1 (ESR1) also blocked Xath
5 activity but efficient inhibition by ESR1 required the DNA binding basic
domain and the conserved WRPW motif. In addition, ESR1 inhibited the abilit
y of Xath5 to directly activate the expression of XBrn3d, a transcription f
actor involved in retinal ganglion cell development. Xath5 could upregulate
expression of X-Delta-1, ESR1, and ESR3, suggesting that Xath5 participate
s in a regulatory loop with the Notch pathway.