Nuclei are fundamental units of vertebrate brain organization, but the mechanisms by which they are generated in development remain unclear. One possibility is that the early patterning of brain tissue into reiterated territories such as neuromeres and columns serves to allocate neurons to distinct nuclear fates. We tested this possibility in chick embryonic ventral midbrain, where a periodic pattern of molecularly distinct stripes (midbrain arcs) precedes the appearance of midbrain nuclei. We found that midbrain arc patterning has a direct relationship to the formation of nuclei. Both differential homeobox gene expression and diagnostic axon tracing studies established that the most medial arc contains primordia for two major midbrain nuclei: the oculomotor complex and the red nucleus. We tested the relationship of the medial arc to oculomotor complex and red nucleus development by perturbing arc pattern formation in Sonic Hedgehog and FGF8 misexpression experiments. We found that Sonic Hedgehog manipulations that induce ectopic arcs or expand the normal arc pattern elicit precisely parallel inductions or expansions of the red nucleus and oculomotor complex primordia. We further found that FGF8 manipulations that push the medial arc rostrally coordinately move both the red nucleus and oculomotor complex anlagen. Taken together, these findings suggest that arcs represent a patterning mechanism by which midbrain progenitor cells are allocated to specific nuclear fates.