Neural crest cells form at the border between the neural plate and the epidermis. The tissue interactions that underlie neural crest cell induction have been investigated primarily by heterotopic grafting experiments in vivo and by conjugating different tissues in vitro. Three models have been proposed to explain the induction of neural crest cells at the neural plate border, i.e. (1) the influence of signals from the mesoderm, (2) changes in ectodermal competence and (3) local interactions between neural and non-neural ectoderm. The weight of the evidence supports the last model, although there are data that suggest a role for signals from the mesoderm. FGFs seem to be necessary but not sufficient for neural crest cell induction. BMP-4 is sufficient to induce neural crest cells from chick neural explants in vitro and intermediate levels of BMP-4-signalling induce neural crest cell markers in Xenopus animal cap assays. These data suggest a gradient model in which neural crest cells are induced by a particular range of BMP-4 activity, although a single-signal model may be too simplistic. Neural crest cell induction may be an ongoing process, in which an initial induction at the neural plate border is followed by further induction within the dorsal neural tube.