We have examined early neuronal differentiation and axonogenesis in the fore- and midbrain of zebrafish embryos to address general issues of early vertebrate brain development. AChE expression and HNK-1 antibody immunoreactivity were used as markers for differentiated neurons and axons, respectively. The pattern of neuronal differentiation followed a stereotyped sequence. AChE-positive cells first appeared between 14 and 16 hr in three small, isolated, bilaterally symmetrical clusters on the surface of the brain. The three clusters--the dorsorostral, ventrorostral, and ventrocaudal clusters--proved to be the progenitors of the telencephalon, ventral diencephalon, and mesencephalic tegmentum, respectively. With further development, more cells were added to these three clusters, and new clusters appeared in the anlage of the epiphysis (18 hr) and in the pituitary and dorsal mesencephalon (by 24 hr). Subsequently, as more neurons differentiated, the gaps of unlabeled cells were reduced; by 48 hr, the cluster boundaries were indistinguishable. Axonogenesis also followed a stereotyped sequence. The first HNK-1-labeled processes arose from the first three clusters of AChE-positive cells and connected the clusters. The earliest axonal growth cones appeared at 16 hr, directed caudally from two to three neurons of the ventrocaudal cluster and pioneering the ventral longitudinal tract. By 18 hr, the tract of the postoptic commissure was initiated by growth cones directed caudally from the ventrorostral cluster toward the ventrocaudal cluster. By 20 hr, axons from the dorsorostral cluster projected ventrally to form the supraoptic tract. The other dorsoventral tracts (the dorsoventral diencephalic tract and the tract of the posterior commissure) became evident between 20 and 24 hr. These observations provide a continuous record of the topological distortions involved in the conversion of the tubular embryonic brain into the contorted adult form. The telencephalon, ventral diencephalon, and hypothalamus originate from the same rostrocaudal level of the neural tube. The pattern of differentiation demonstrated that the early development of the rostral neural tube occurs simultaneously in several independent centers, similar to the overtly segmental development of the hindbrain.