The formation of the vertebrate nervous system is initiated at gastrula stages of development, when signals from a specialized cluster of cells (the organizer) trigger neural development in the ectoderm. This process, termed neural induction, was first described in 1924 and stemmed from experiments on amphibia (Spemann & Mangold 1924). In recent years, the molecular mechanisms underlying neural induction in the amphibian have been elucidated. Surprisingly, neuralizing agents secreted by the organizer do not act via receptor-mediated signaling events; rather, these factors antagonize local epidermal inducers within the cells of the dorsal ectoderm and function to uncover the latent neural fate of these cells. Many of the recent advances in our understanding of vertebrate neural induction come from studies on the frog, Xenopus laevis. It is now clear that a blockade of signaling of the bone morphogenetic proteins (BMPs) during gastrula stages is sufficient to initiate neuralization of the ectoderm in this species. Thus this review first details our current understanding of neural induction, using the amphibian as a model. We then use data emerging from other systems to examine the extent to which the Xenopus studies can be applied to other vertebrate species. The initiation of the neurectoderm-specific gene expression program and subsequent steps in patterning and neuronal development are only touched on here. We focus primarily on the initial establishment of the neural fate in the vertebrate gastrula ectoderm.