The functional differences between the many mature neuronal types make the origins of cellular diversity in the nervous system one of the most intriguing problems in biology. This paper discusses recent experiments which explore the mechanisms generating cell diversity in the vertebrate central nervous system, focusing particularly on the immediate precursor to neurons and on neuronal differentiation. Transplantation experiments have been used to explore regional and temporal differences in the cells of the neuroepithelium. The effects of specific genes on neuronal development have been examined by mutational analysis in transgenic mice and in established neuronal stem cell lines. The combination of methods now available allow increasingly powerful dissection of the molecular and cellular mechanisms that generate the large number of different neurons in the vertebrate brain.