The organizer has traditionally been considered the major source of somite-inducing signals. We show here that signaling from the neural plate specifies somite tissue and regulates somite size in the Xenopus gastrula. Ectopic undifferentiated neural tissue induces massive somite expansion at the expense of intermediate and lateral plate mesoderm. Although the early expanded somite expresses muscle-specific markers, only a portion terminally differentiates, suggesting that myotome development requires additional signals. Explant assays demonstrate that neural tissue induces somite-specific marker expression even in the absence of the organizer. Finally, we demonstrate that neural tissue is required for proper somite development because elimination of neural precursors results in pronounced somite reduction. Thus, an important reciprocal interaction exists between somite and neural tissue that is mutually reinforcing and critical for normal embryonic patterning.