Late tooth morphogenesis is characterized by a series of events that determine cusp morphogenesis and the histodifferentiation of epithelial cells into enamel-secreting ameloblasts. Mice lacking the homeobox gene Msx2 exhibit defects in cusp morphogenesis and in the process of amelogenesis. To better understand the basis of the Msx2 mutant tooth defects, we have investigated the function of Msx2 during late stages of tooth morphogenesis. Cusp formation is thought to be under the control of the enamel knot, which has been proposed to act as an organizing center during this process (Vaahtokari et al. [ 1996] Mech. Dev. 54:39-43). Bone morphogenetic protein-4 (BMP4) has been suggested to mediate termination of enamel knot signaling by means of regulation of programmed cell death (Jernvall et al. [ 1998] Development 125:161-169). Here, we show that Bmp4 expression in the enamel knot is Msx2-dependent. We further show that during amelogenesis Msx2 is required for the expression of the extracellular matrix gene Laminin 5 alpha 3, which is known to play an essential role during ameloblast differentiation. This result thus provides a paradigm for understanding how transcription factors and extracellular matrix can be integrated into a developmental pathway controlling cell differentiation.