During early patterning of the vertebrate neuraxis, the expression of the paired-domain transcription factor Pax-3 is induced hn the lateral portions of the posterior neural plate via posteriorizing signals emanating from the late organizer and posterior nonaxial mesoderm. Using a dominant-negative approach, we show in explant assays that Pax-3 inductive activities from the organizer do not depend on FGF,retinoic acid or XWnt-8 either alone or In combination, suggesting that the organizer map produce an unknown posteriorizing factor. However, Pax-3 inductive signals from posterior nonaxial mesoderm are Wnt-dependent. We show that Pax-3 expression in the lateral neural plate expands in XWnt-8-injected embryos and is blocked by dominant-negative XWnt-8. Similarly, we show that the homeodomain transcription factor Msx-1 which like Pax-3 is an early marker of the lateral neural plate, is induced by posterior nonaxial mesoderm and blocked by dominant-negative XWnt-8. Finally, we show that Rohon-Beard primary neurons, a cell type that develops within the lateral neural plate, we also blocked in vivo by dominant-negative Xwnt-8. Together these data support a model in which patterning of the lateral neural plate by Wnt-mediated signals is an early event that establishes a posteriolateral domain, marked by Pax-3 and Msx-1 expression, from which Rohon-Beard cells and neural crest will subsequently arise. (C) 1999 Academie Press.