SYNOPSIS. As a homozygous recessive, gene e in the Mexican axolotl prevents optic vesicles from forming, thus producing an eyeless animal. Previous experimental evidence has indicated that the gene acts by affecting the ability of anterior medullary plate ectoderm in the eye field to respond to inductive mesodermal signals. Other possible mechanisms of gene action are described. The hypothalamus is also affected and “eyeless” animals are sterile. The absence of eyes results in increased levels of circulating MSH and thus the animal is also highly pigmented. Eyes may be grafted into the heads of “eyeless” axolotls. These eyes become functional and lead to normal pigmentation. When present as a homozygous recessive, gene r acts to allow the penetration of heterozygous e (E/e r/r). This results in abnormal eye development.