The basic helix-loop-helix (bHLH) factor Mash1 is expressed in the developing nervous system. Null mutation of Mash1 results in loss of olfactory and autonomic neurons and delays differentiation of retinal neurons, indicating that Mash1 promotes neuronal differentiation. Other bHLH genes, Math/NeuroD/Neurogenin, all expressed in the developing nervous system, have also been suggested to promote neuronal differentiation. In contrast, another bHLH factor, HES1, which is expressed by neural precursor cells but not by neurons, represses Mash1 expression and antagonizes Mash1 activity in a dominant negative manner. Forced expression of HES1 in precursor cells blocks neuronal differentiation in the brain and retina, indicating that HES1 is a negative regulator of neuronal differentiation. Conversely, null mutation of HES1 up-regulates Mash1 expression, accelerates neuronal differentiation, and causes severe defects of the brain and eyes. Thus, HES1 regulates brain and eye morphogenesis by inhibiting premature neuronal differentiation, and the down-regulation of HES1 expression at the right time is required for normal development of the nervous system. Interestingly, HES1 can repress its own expression by binding to its promoter, suggesting that negative autoregulation may contribute to down-regulation of HES1 expression during neural development. Recent studies indicate that HES1 expression is also controlled by RBP-J, a mammalian homologue of Suppressor of Hairless [Su(H)], and Notch, a key membrane protein that may regulate lateral specification through RBP-J during neural development. Thus, the Notch-->RBP-J-->HES1-Mash1 pathway may play a critical role in neuronal differentiation.