The early patterning of the vertebrate central nervous system involves
the generation of progenitor cells with distinct fates at rostral and
caudal levels of the neuraxis. We provide evidence that the assignmen
t of early rostrocaudal differences in progenitor cell properties is e
stablished by spatial restrictions in the signaling properties of the
paraxial mesoderm and epidermal ectoderm. Caudal level paraxial mesode
rm secretes a factor, distinct from retinoic acid or fibroblast growth
factors (FGFs), that can impose caudal fates on prospective anterior
proencephalic progenitors. The caudalizing activity of the paraxial me
soderm can, however, be induced by FGF signaling. The distinct propert
ies of cells at rostral and caudal levels of the neural plate appear t
o depend, in addition, on the early exclusion of bone morphogenetic pr
oteins (BMPs) from rostral lever epidermal ectoderm. Thus, differences
in the signaling properties of cell groups that flank the neural plat
e appear to contribute to the early rostrocaudal identity of neural ce
lls, distinguishing progenitor cells at prospective anterior proenceph
alic regions from those at more caudal levels of the neuraxis.