In vertebrates, the delineation of the neural plate from a region of the primitive ectoderm is accompanied by the onset of specific gene expression which in turn promotes the formation of the nervous system. Here we show that SOX1, an HMG-box protein related to SRY, is one of the earliest transcription factors to be expressed in ectodermal cells committed to the neural fate: the onset of expression of SOX1 appears to coincide with the induction of neural ectoderm. We demonstrate a role for SOX1 in neural determination and differentiation using an inducible expression P19 cell system as an in vitro model of neurogenesis. Misexpression of SOX1 can substitute for the requirement of retinoic acid to impart neural fate to competent ectodermal P19 cells. Using a series of antigenic markers which identify early neural cell types in combination with BrdU labeling, we demonstrate a temporal and spatial correlation between the differentiation of cell types along the dorsoventral axis of the neural tube and the downregulation of SOX1 expression. SOX1, therefore, defines the dividing neural precursors of the embryonic central nervous system (CNS).