This chapter describes early events that govern the formation of neural precursors and their differentiation into neurons in a developing vertebrate central nervous system (CNS). 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 proneural genes as critical regulatory factors that promote the differentiation of neural precursors into neurons and explains how the process of neural patterning may control the fate of neural precursors by regulating the activity of the proneural genes. The neural precursors in the CNS are already restricted in their fate when they form in the embryo as a consequence of the patterning processes that specify their position along the neuraxes, and patterning genes trigger the proneural gene cascade at the proper time and place, thus determining patterns of neuronal differentiation. The development of the CNS can be represented as a series of fate choices progressively made by embryonic cells in response to both intrinsic and extrinsic cues. The neural precursors for the CNS initially choose their fate by default, but neural patterning is instrumental in instructing their subsequent neuronal fate by establishing a complex code of gene expression.