In this review I summarize recent findings on the contributions of different cell groups to the formation of the basic plan of the nervous system of vertebrate embryos. Midline cells of the mesoderm--the organizer, notochord, and prechordal plate--and midline cells of the neural ectoderm--the notoplate and floor plate--appear to have a fundamental role in the induction and patterning of the neural plate. Vertical signals acting across tissue layers and planar signals acting through the neural epithelium have distinct roles and cooperate in induction and pattern formation. Whereas the prechordal plate and notochord have distinct vertical signaling properties, the initial anteroposterior (A-P) pattern of the neural plate may be induced by planar signals originating from the organizer region. Planar signals from the notoplate may also contribute to the mediolateral (M-L) patterning of the neural plate. These and other findings suggest a general view of neural induction and axial patterning.