Induction of the neural ectoderm in the anterior part of the epiblast starts shortly before gastrulation, by inductive signals arising from the anterior visceral endoderm (AVE) and precursors of the node. During gastrulation, the node and its derivatives (the prechordal plate and the notochord) protect the overlying anterior epiblast cells and assist them in maintaining neural ectoderm identity and together with the pharyngeal endoderm in the head region, signal them to elongate into columnar neural plate cells. The edges of the neural plate thicken and migrate toward the midline of the embryo and their eventual fusion at the dorsal midline creates a hollow neural tube. Bending of the neural plate to form the neural tube occurs at two principle sites: the median hinge point (MHP) that overlies the notochord, and the dorsolateral hinge points (DLHPs) that are situated at the connection between the neural plate and the remainder of the ectoderm. The molecular and morphological events underlying the bending process differ between the cranial and spinal neural plate regions.
The neural tube is subdivided into four distinguishable regions: the prosencephalon, mesencephalon, rhombencephalon and spinal cord. In addition, it is divided along the dorso-ventral axis into the roof, alar, basal and floor plates. The cells in the dorsal ridge of the neural tube migrate away from the tube as neural crest cells.
The neural ectoderm forms the central (brain and spinal cord) and peripheral nervous systems. In addition, regions of the sensory organs (eye, nose and ear) develop from the neural ectoderm. The neural ectoderm also contributes to neural crest progenitors, which gives rise to tissues such as bone, cartilage, dermis, heart, smooth muscle, tendons and ligaments.