The generation of distinct classes of neurons at defined positions within the developing vertebrate nervous system depends on inductive signals provided by local cell groups that act as organizing centers. Genetic and embryological studies have begun to elucidate the processes that control the pattern and identity of neuronal cell types. Here we discuss the cellular interactions and molecular mechanisms that direct neuronal cell fates in the dorsal half of the vertebrate central nervous system. The specification of dorsal neuronal cell fates appears to depend on a cascade of inductive signals initiated by cells of the epidermal ectoderm that flank the neural plate and propagated by roof plate cells within the neural tube. Members of the transforming growth factor-beta (TGF beta) family of secreted proteins have a prominent role in mediating these dorsalizing signals. Additional signals involving members of the Wnt and fibroblast growth factor (FGF) families may also contribute to the proliferation and differentiation of dorsal neuronal cell types.