The differentiation of avian somites and skeletal muscles, which themselves are derived from somites, was studied in ovo after the isolation of the unsegmented segmental plate from the notochord and/or neural tube by surgical operations at the level of the segmental plate. In each experiment, the newly formed somites had a normal histological structure, with an outer epithelial somite and core cells in the somitocoeles. Thereafter, the three derivatives of the somites (dermatome, myotome and sclerotome) reacted differently to the different operations. When the somites developed without the notochord, only somitocoele cells showed massive cell death, and muscles developed regardless of the presence or absence of the neural tube. On the contrary, no cell death was observed in any part of the somites that were formed with the neural tube or the notochord present, and muscle cells developed. However, in those embryos that retained only the notochord, striated muscles developed only in the lateral body wall. In each of the experimental operations, the surface ectoderm always covered the somites, and, regardless of the state of sclerotome and/or myotome differentiation, the dermatome always survived. These histological observations indicate that the first step in somite formation is independent of axial structures. The results further suggest that the notochord may produce diffusible factors that are necessary for the survival and further development of sclerotomal cells, and that both the neural tube and notochord can support muscle differentiation. However, it is likely that each structure has a relationship to the development of epaxial muscles and hypaxial muscles respectively. Furthermore, an intimate relationship may also exist between the surface ectoderm and the development of the dermatome.