Nervous tissue is derived from early embryonic ectoderm, which also gives rise to epidermal derivatives such as skin. The progression from naive ectoderm to differentiated postmitotic neurons involves multiple steps, two of which are crucial in shaping the final neurogenesis pattern. First, is the identification of the neural plate by the process of neural induction. Second, is the selection of a restricted number of sites within the neural plate where neurogenesis, the process leading to final differentiation of neural precursors, is initiated. Recent findings point to the existence of positive inducers of the neural state, whereas, neurogenesis initiation sites appear to be largely defined by inhibition. However, both neural induction and the initiation of neurogenesis appear to be connected to cell cycle control systems that govern whether stem cell maintenance and cell proliferation, or cell specification and differentiation, take place.