Nervous system development relies on a complex signaling network to engineer the orderly transitions that lead to the acquisition of a neural cell fate. Progression from the non-neuronal pluripotent stem cell to a restricted neural lineage is characterized by distinct patterns of gene expression, particularly the restriction of neuronal gene expression to neurons. Concurrently, cells outside the nervous system acquire and maintain a non-neuronal fate that permanently excludes expression of neuronal genes. Studies of the transcriptional repressor REST, which regulates a large network of neuronal genes, provide a paradigm for elucidating the link between epigenetic mechanisms and neurogenesis. REST orchestrates a set of epigenetic modifications that are distinct between non-neuronal cells that give rise to neurons and those that are destined to remain as nervous system outsiders.