Retinoic acid (RA) generated by Raldh2 in paraxial mesoderm is required for specification of the posterior hindbrain, including restriction of Hoxb1 expression to presumptive rhombomere 4 (r4). Hoxb1 expression requires 3' and 5' RA response elements for widespread induction up to r4 and for r3/r5 repression, but RA has previously been detected only from r5-r8, and vHnf1 is required for repression of Hoxb1 posterior to r4 in zebrafish. We demonstrate in mouse embryos that an RA signal initially travels from the paraxial mesoderm to r3, forming a boundary next to the r2 expression domain of Cyp26a1 (which encodes an RA-degrading enzyme). After Hoxb1 induction, the RA boundary quickly shifts to r4/r5, coincident with induction of Cyp26c1 in r4. A functional role for Cyp26c1 in RA degradation was established through examination of RA-treated embryos. Analysis of Raldh2-/- and vHnf1-/- embryos supports a direct role for RA in Hoxb1 induction up to r4 and repression in r3/r5, as well as an indirect role for RA in Hoxb1 repression posterior to r4 via RA induction of vHnf1 up to the r4/r5 boundary. Our findings suggest that Raldh2 and Cyp26 generate shifting boundaries of RA activity, such that r3-r4 receives a short pulse of RA and r5-r8 receives a long pulse of RA. These two pulses of RA activity function to establish expression of Hoxb1 and vHnf1 on opposite sides of the r4/r5 boundary.