FGF8 is known to be an important regulator of forebrain development. Here, we investigated the effects of varying the level of Fgf8 expression in the mouse forebrain. We detected two distinct responses, one that was proportionate with Fgf8 expression and another that was not. The latter response, which led to effects on cell survival, displayed a paradoxical relationship to Fgf8 dosage. Either eliminating or increasing Fgf8 expression increased apoptosis, whereas reducing Fgf8 expression had the opposite effect. To explain these counterintuitive observations, we suggest that an FGF8-dependent cell-survival pathway is negatively regulated by intracellular inhibitors produced in proportion to FGF8 concentration. Our data provide insight into the function of FGF8 in forebrain development and underscore the value of using multiple alleles and different experimental approaches to unravel the complexities of gene function in vertebrate development.