Sonic hedgehog (SHH) signaling from the frontonasal ectodermal zone (FEZ) is a key regulator of craniofacial morphogenesis. Along with SHH, pre-B-cell leukemia homeobox (PBX) transcription factors regulate midfacial development. PBXs act in the epithelium during fusion of facial primordia, but their specific interactions with SHH have not been fully investigated. We hypothesized that PBX1/3 regulate SHH expression in the FEZ by activating or repressing transcription. The hypothesis was tested by manipulating PBX1/3 expression in chick embryos and profiling epigenomic landscapes at early developmental stages. PBX1/3 expression was perturbed in the chick face beginning at stage 10 (HH10) using RCAS viruses, and the resulting SHH expression was assessed at HH22. Overexpressing PBX1 expanded SHH expression, while overexpressing PBX3 decreased SHH expression. Conversely, reducing PBX1 expression decreased SHH expression, but reducing PBX3 induced ectopic SHH expression. We performed ATAC-seq and mapped binding of PBX1 and PBX3 with ChIP-seq on the FEZ at HH22 to assess direct interactions of PBX1/3 with the SHH locus. These multi-omics approaches uncovered a 400 bp PBX1-enriched element within intron 1 of SHH (chr2:8,173,222-8,173,621). Enhancer activity of this element was demonstrated by electroporation of reporter constructs in ovo and luciferase reporter assays in vitro . When bound by PBX1, this element upregulates transcription, while it downregulates transcription when bound by PBX3. The present study identifies a cis- regulatory element, named SFE1, that interacts with PBX1/3 to modulate SHH expression in the FEZ and establishes that PBX1 and PBX3 play complementary roles in SHH regulation during embryonic development.