Cranial sensory ganglia in vertebrates develop from the ectodermal placodes, the neural crest, or both. Although much is known about the neural crest contribution to cranial ganglia, relatively little is known about how placode cells form, invaginate and migrate to their targets. Here, we identify Pax-3 as a molecular marker for placode cells that contribute to the ophthalmic branch of the trigeminal ganglion and use it, in conjunction with DiI labeling of the surface ectoderm, to analyze some of the mechanisms underlying placode development. Pax-3 expression in the ophthalmic placode is observed as early as the 4-somite stage in a narrow band of ectoderm contiguous to the midbrain neural folds. Its expression broadens to a patch of ectoderm adjacent to the midbrain and the rostral hindbrain at the 8- to 10-somite stage. Invagination of the first Pax-3-positive cells begins at the 13-somite stage. Placodal invagination continues through the 35-somite stage, by which time condensation of the trigeminal ganglion has begun. To challenge the normal tissue interactions leading to placode formation, we ablated the cranial neural crest cells or implanted barriers between the neural tube and the ectoderm. Our results demonstrate that, although the presence of neural crest cells is not mandatory for Pax-3 expression in the forming placode, a diffusible signal from the neuroectoderm is required for induction and/or maintenance of the ophthalmic placode.