Many important findings in the past year have helped to identify multiple cellular interactions and signals in vertebrates that govern induction of neuroectoderm, its patterning, neural tube formation, and the subsequent differentiation of neurons. For example, the neural inducers have been shown to function as inhibitors of BMP signaling, the roles of bone morphogenetic proteins and Sonic hedgehog during dorso-ventral specification of the neural tube have been further elucidated and the realization of a dorso-ventral inversion of the body axis contributed to a better understanding of evolutionarily related genes and functions between vertebrates and invertebrates.