We have cloned a cDNA encoding the chick HNF-3 beta gene and have used RNA and antibody probes that detect HNF-3 beta to monitor the normal and induced expression of the gene in early embryos. HNF-3 beta expressed in Koller's sickle, at the onset of primitive streak formation, and later in Hensen's node. At neural plate and neural tube stages, HNF-3 beta is expressed transiently in the notochord and is then expressed by floor plate cells. Prospective floor plate cells that are located in the epiblast immediately anterior to Hensen's node prior to its regression do not express HNF-3 beta, providing evidence that floor plate fate is normally determined only after these cells populate the midline of the neural plate and overlie the notochord. Removal of the notochord in vivo prevents floor plate development and in this condition HNF-3 beta is not expressed by cells at the ventral midline of the neural tube. Notochord grafts induce ectopic floor plate development and ectopic neural expression of HNF-3 beta. In vitro, neural plate explants are induced to express HNF-3 beta by notochord cells in a contact-dependent but cycloheximide-resistant manner, providing evidence that expression of HNF-3 beta is a direct response of neural plate cells to notochord-derived inducing signals.