This chapter describes the early events that govern the formation of neural precursors and their differentiation into neurons in the developing vertebrate central nervous system (CNS). First, it explains how the precursor cells for the CNS arise in the vertebrate embryo and how they differ from those for other developmental lineages. It also describes the role of the proneural genes as critical regulatory factors that promote the differentiation of neural precursors into neurons. Finally, the chapter explains how the process of neural patterning may control the fate of neural precursors by regulating the activity of the proneural genes. Neurogenesis within the neural tube is organized along a third developmental axis that corresponds to the apical-basal orientation of the neuroepithelium. Progenitor cells consist of neuroepithelial cells (NECs) localized along the apical surface of the ventricular zone (no shading) within which their nucleus transverses during the cell cycle. During cell division, the two daughter cells separate at the apical surface, with recent studies suggesting that they maintain contact with the basal surface. A precursor undergoes neuronal differentiation when its nucleus migrates laterally (light gray), exiting the cell cycle.