During development, early inducing programs must later be counterbalanced for coordinated tissue maturation. In Xenopus laevis embryos, activation of the Meis3 transcription factor by a mesodermal Wnt3a signal lies at the core of the hindbrain developmental program. We now identify a hindbrain restricting circuit, surprisingly comprising the hindbrain inducers Wnt3a and Meis3, and Tsh1 protein. Functional and biochemical analyses show that upon Tsh1 induction by strong Wnt3a/Meis3 feedback loop activity, the Meis3-Tsh1 transcription complex represses the Meis3 promoter, allowing cell cycle exit and neuron differentiation. Meis3 protein exhibits a conserved dual-role in hindbrain development, both inducing neural progenitors and maintaining their proliferative state. In this regulatory circuit, the Tsh1 co-repressor controls transcription factor gene expression that modulates cell cycle exit, morphogenesis and differentiation, thus coordinating neural tissue maturation. This newly identified Wnt/Meis/Tsh circuit could play an important role in diverse developmental and disease processes.