To obtain gene sequences controlling the early steps of amphibian neurogenesis, we have performed differential screening of a subtractive cDNA library prepared by a novel PCR-based method from a single presumptive neural plate of a Xenopus laevis late-gastrula embryo. As a result we have isolated a fragment of a novel homeobox gene (named XANF-1, for Xenopus anterior neural folds). This gene is expressed predominantly in the anterior part of the developing nervous system. Such preferential localization of XANF-1 mRNA is established from its initially homogenous distribution in ectoderm of early gastrula. This change in the expression pattern is conditioned by a differential influence of various mesoderm regions on ectoderm: anterior mesoderm activates XANF-1 expression in the overlying ectoderm, whereas posterior axial and ventral mesoderm areas inhibit it. The data obtained demonstrate for the first time that selection of genes for specific expression in the CNS of the early vertebrate embryo is affected not only by chordamesoderm (a neural inductor) but also by ventral mesoderm.