Proteins of the Netrin family have been implicated in axon guidance in both C. elegans and vertebrates. Here, we report the cloning and expression analysis of a zebrafish netrin homologue (net1). net1 is expressed in the floor plate and the anterior ventral neural tube. Its expression is ectopically induced by misexpression of sonic hedgehog (shh) and a dominant negative mutant of the regulatory subunit of protein kinase A (dnReg). Ectopic activation of net1, however, is restricted to distinct regions in the brain. Upon overexpression of shh or dnReg in cyclops mutants, which have strongly impaired net1 expression in the ventral neural tube, rescue of net1 expression was observed in the brain but not in the spinal cord. Ectopic expression of dnReg and Shh protein can be detected at high levels throughout injected embryos from pre-gastrula stages onwards suggesting that the competence of the neural plate to respond to Shh signalling activity differs regionally. Similar to net1, axial, the zebrafish homologue of mammalian HNF3beta, which is also expressed along the ventral neural tube, is ectopically induced in the brain of embryos injected with dnReg mRNA. Neurons differentiate normally within domains of ectopic net1 and axial expression. Thus, dorsal neuronal differentiation appears to be unaffected despite co-expression of a gene program specific for the ventral neural tube. This also suggests that these ectopically expressing regions have not differentiated into floor plate.