During development, distinct classes of neurons are specified in preci
se locations along the dorso-ventral and anterior-posterior axes of th
e neural tube. We provide evidence that intersections of Shh, which is
expressed along the ventral neural tube, and FGF8, which is locally p
roduced at the mid/hindbrain boundary and in the rostral forebrain, cr
eate induction sites for dopaminergic neurons in the midbrain and fore
brain. The same intersection, when preceded by a third signal, FGF4, w
hich is expressed in the primitive streak, defines an inductive center
for hindbrain 5-HT neurons. These findings illustrate that cell patte
rning in the neural plate is a multistep process in which early induce
rs, which initially divide the neural plate into crude compartments, a
re replaced by multiple local organizing centers, which specify distin
ct neuronal cell types within these compartments.