In Xenopus, the hatching and cement glands form at important boundaries in the head. We have examined induction of these glands in order to see the basis for this ectodermal patterning. Ectoderm can be induced to form hatching and cement glands by dorsal mesoderm and by the neural plate. Because the neural plate is sufficient to induce hatching and cement glands and lies adjacent to presumptive hatching and cement glands at the time of induction, it is the best candidate for the in vivo inducer of these tissues. The cement gland is restricted to the front of the head in part because the anterior but not posterior neural plate is capable of inducing it. The hatching gland is also restricted to the head, but can be induced by both anterior and posterior neural plates. Therefore, some factor suppresses hatching gland differentiation in the trunk. Transplanted neural plate pieces induced hatching gland cells in the ectoderm of embryos, suggesting that the inductive signal is planar. Treatment with retinoic acid or lithium at the start of gastrulation caused a loss of head structures. The presence of hatching gland in lithium-treated embryos suggests that these two agents have distinct effects and supports the idea that the induction of hatching and cement glands involves different pathways.