A study of the induction of the prospective neural crest in Xenopus laevis embryos has been carried out, using the expression of Xslug as a specific marker for the neural crest. We have analyzed the competence and the specification of the neural crest. The competence to express Xslug was analyzed using two different approaches: (1) in vitro culture of conjugates of dorsal mesoderm and ectoderm taken from embryos at different ages and (2) grafts of equivalent pieces of ectoderm in the neural fold region of a gastrula or a neurula. Similar results were obtained with both methods: the ectoderm loses the competence to respond to neural fold induction at the end of gastrulation. Neural crest specification was analyzed by culturing a region of the ectoderm that contained the prospective neural crest and analyzing Xslug expression. Our results show that neural folds are specified autonomously to express Xslug by the end of gastrulation. By grafting labeled neural plate into lateral epidermis we have shown that neural crest can be induced by an interaction between neural plate and epidermis. Furthermore, neural crest cells come from both tissues. We have discarded the possibility that these neural crest cells are induced by a signal coming from the underlying lateral plate, by a homeogenetic signal coming from the host neural plate, or by regeneration of crest cells from the dissected neural plate. We propose a model to explain how the neural crest cells are induced at the border of the neural plate in X. laevis.