Members of the GATA transcription factor gene family have been implicated in a variety of developmental processes, including that of the vertebrate central nervous system. However, the role of GATA proteins in spinal cord development remains unresolved. In this study, we investigated the expression and function of two GATA proteins, GATA2 and GATA3, in the developing chick spinal cord. We show that both proteins are expressed by a distinct subpopulation of ventral interneurons that share the same dorsoventral position as CHX10-positive V2 interneurons. However, no coexpression is observed between the two GATA proteins and CHX10. By in vivo notochord grafting and cyclopamine treatment, we demonstrate that the spatially restricted pattern of GATA3 expression is regulated, at least in part, by the signaling molecule Sonic hedgehog. In addition, we further show that Sonic hedgehog induces GATA3 expression in a dose-dependent manner. Using in ovo electroporations, we also demonstrate that GATA2 is upstream of GATA3 in the same epigenetic cascade and that GATA3 is capable of inducing GATA2 expression in vivo. Furthermore, the ectopically expressed GATA proteins can repress differentiation of other ventral cell fates, but not the development of progenitor populations identified by PAX protein expression. Taken together, our findings strongly suggest an important role for GATA2 and GATA3 proteins in the establishment of a distinct ventral interneuron subpopulation in the developing chick spinal cord.