FGF signaling from the midbrain-hindbrain boundary (MHB, isthmus) plays a major role both in maintenance of the MHB and induction of the tectum and cerebellum . Since different levels of FGF signaling in the MHB result in a qualitative difference in inducing activity , FGF signaling in the MHB should be tightly regulated positively and negatively at multiple steps to ensure correct levels of FGF signaling . Factors that negatively regulate FGF signal around the MHB are reported . However, factors that ensure strong FGF signal in the MHB are largely unknown. Here we report the identification of Canopy1 (Cnpy1), a novel MHB-specific, Saposin-related protein that belongs to an evolutionarily conserved protein family. The cnpy1 gene was expressed specifically in the MHB of zebrafish embryos. Exogenous FGF8 induced expression of cnpy1 in the tectal primordial. Knockdown of cnpy1 resulted in MHB defects and impaired FGF signaling in a cell-autonomous manner. Cnpy1 is localized in the endoplasmic reticulum and interacts with FGFR1. This study highlights a positive-feedback loop between the FGFR pathway and Cnpy1 that may ensure the strength of FGF signaling in the MHB, leading to correct development of the tectum and cerebellum.