Expression of a truncated activin type II receptor, which blocks signaling by activin, neuralizes explants of embryonic cells that would otherwise become epidermal cells. This neuralization is direct and does not require the presence of mesoderm. The induced neural tissue expresses general molecular markers of the central nervous system as well as an array of neural markers along the anteroposterior axis. In the context of the whole embryo, expression of this truncated activin receptor diverts prospective ectoderm and endoderm to a neural fate. We propose that inhibition of the activin type II receptor signaling causes the cells of Xenopus embryos to adopt a neural fate. These results, along with previous experiments performed in Drosophila, suggest that the formation of the nervous system in vertebrates and invertebrates occurs by a common strategy.