We have investigated the interactions between mesoderm and ectoderm that result in the formation of a regionally differentiated nervous system in Xenopus embryos. We have used genes expressed at different positions along the neural tube as regional markers of neural induction in both whole, and in experimentally manipulated embryos. By comparing transcription from the anterior marker, XIF3, with that from the posterior marker, XIHbox6, and the general neural marker XIF6, we have shown that the normal induction process requires interactions between ectoderm and mesoderm that persist through gastrulation into the late neurula stages. We have found that competence of the ectoderm to respond to induction is lost at the same early neurula stage for all three marker genes. Using rhodamine dextran-labelled mesoderm, we have established that the duration of contact between ectoderm and mesoderm required for gene activation in conjugates is the same for each of the markers. We have, however, identified regions of the mesoderm that can induce different combinations of neural marker gene expression. The anterior mesoderm induces expression of the anterior marker, XIF3, and the later migrating posterior mesoderm induces the ectoderm overlying it to express the posterior marker XIHbox6. It has been proposed that neural inducing signals reach the ectoderm by two different routes: from mesoderm lying directly beneath the ectoderm or along the plane of the ectoderm. We have assessed the contribution of each route in respect of our three neural markers and find that a signal passing directly from mesoderm to ectoderm fully accounts for neural gene expression. We were unable to detect an inducing signal that passes along the plane of the ectoderm.