We report a time-course analysis of the effect of retinoic acid (RA) on the development of the mouse central nervous system (CNS) from the beginning of gastrulation throughout induction and patterning of the neural tube. RA administration induces three different, stage-specific alterations of brain development, indicating perturbation of different morphogenetic steps during the establishment of a neural pattern. In particular, treatment at mid-late streak stage (7.2-7.4 days post coitum (d.p.c.)) results in early repression of Otx2 expression in the posterior neuroectoderm of the head fold and in the ventral mid line, including the prechordal plate and the rostralmost endoderm, followed by loss of forebrain morphological and molecular identities, as revealed by analysis of the expression of regionally-restricted brain genes (Otx2, Otx1, Emx2, Emx1 and Dlx1). In these embryos, reduction of the Otx2 expression domain correlates with hindbrain expansion marked by rostral extension of the Hoxb-1 expression domain. Our analysis indicates that RA interferes with the correct definition of both planar and vertical morphogenetic signals at specific developmental stages by affecting gene expression in the regions which are likely either to produce or to respond to these signals. We suggest that retinoids may contribute to early definition of head from trunk structures by selecting different sets of regulatory genes.