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The identity of cell types generated along the dorsoventral axis of the neural tube depends on inductive signals that derive from both mesodermal and neural cells. To define the nature of these signals, we have analyzed the differentiation of cells in neural plate explants. Motor neurons and neural crest cells differentiate in vitro from appropriate regions of the neural plate, indicating that the specification of cell fate along the dorsoventral axis of the neural tube begins at the neural plate stage. Motor neuron differentiation can be induced by a diffusible factor that derives initially from the notochord and later from floor plate cells. By contrast, floor plate induction requires contact with the notochord. Thus, the identity and patterning of neural cell types appear to involve distinct contact-mediated and diffusible signals from the notochord and floor plate.