Brn-3.0, a POU-domain transcription factor, is expressed in specific postmitotic neurons in the dorsal part of the neural tube which are among the first spinal cord neurons to appear in development. In the mature spinal cord, the Brn-3.0 cells form a numerous population of scattered neurons in the intermediate spinal gray. Ablation of the notochord in chick embryos extends the domain of Brn-3.0 expression into the ventral neural tube, while ectopic grafts of notochord tissue suppress Brn-3.0 expression. The notochord effects on Brn-3.0 expression are reproduced in vivo by the implantation of a local source of recombinant Shh protein. The down-regulation of Brn-3.0 expression in the dorsal spinal cord by the notochord and Shh contrasts with the known inductive effects of these ventral signals on the approximately simultaneous development of the spinal motor neurons. In cultured explants of neural plate from the region of the presumptive spinal cord, Brn-3.0 neurons develop in the absence of surface ectoderm and ventral midline tissue, suggesting that the Brn-3.0 phenotype may represent a "default" developmental pathway for early spinal cord neurons. Together these results advance the understanding of the mechanism of the generation of neuronal diversity in the developing vertebrate CNS.