The vertebrate nervous system arises through a series of inductive interactions, beginning with the induction of the neural plate and the rostrocaudal patterning of the neural tube. The process continues with dorsoventral patterning of the neural tube, during which floor plate cells and motor neurons are induced ventrally by interactions of the neural tube with the notochord, and dorsal cell types are induced via neural plate/ectodermal interactions. Later interactions result in the formation of interneurons as well as neuronal migrations. Recent progress, guided in part by knowledge of evolutionary conservation of transcription factors and signaling pathways, is beginning to reveal the cellular and molecular bases of each of these steps in neuronal patterning.