Hmx1 encodes a homeodomain transcription factor expressed in the developing lateral craniofacial mesenchyme, retina and sensory ganglia. Mutation or mis-regulation of Hmx1 underlies malformations of the eye and external ear in multiple species. Deletion or insertional duplication of an evolutionarily conserved region (ECR) downstream of Hmx1 has recently been described in rat and cow, respectively. Here, we demonstrate that the impact of Hmx1 loss is greater than previously appreciated, with a variety of lateral cranioskeletal defects, auriculofacial nerve deficits, and duplication of the caudal region of the external ear. Using a transgenic approach, we demonstrate that a 594 bp sequence encompassing the ECR recapitulates specific aspects of the endogenous Hmx1 lateral facial expression pattern. Moreover, we show that Hoxa2, Meis and Pbx proteins act cooperatively on the ECR, via a core 32 bp sequence, to regulate Hmx1 expression. These studies highlight the conserved role for Hmx1 in BA2-derived tissues and provide an entry point for improved understanding of the causes of the frequent lateral facial birth defects in humans.