In early blastocyst, of three germ layers (ectoderm, endoderm and mesoderm), ectoderm gives rise to neural tissues. Initial mesodermal signals induce ectodermal cells to become neuroepithelial cells that rapidly multiply to form neural plate.
Neural induction is controlled by an instructive signal from fibroblast growth factor (FGF). FGF can also inhibit BMP (bone morphogenetic protein) that in the presence of WNT molecules converts ectodermal cells into epidermis. In this induction step, some roles of NOTCH signaling are also known [Lowell S et al. (2006) Notch promotes neural lineage entry by pluripotent embryonic stem cells, PLoS Biol. 4: e121 and for a review, Louvi, A and Artavanis-Tsakonas, S. (2006) Notch signalling in vertebrate neural development, Nat Rev Neurosci 7:93-102].
The neural tube forms from the neural plate. WNT, FGFs and Retinoic acid (RA) (forming a gradient shown here in green shade) impart hindbrain character to the neural tube. Signaling molecules (such as Nodal-related proteins that inhibit both WNT and BMP members, and WNT-inhibitors like Cerbeus and Dickkopf) secreted from extra-embryonic tissue prevent the caudalization of the neural tube and thereby promote forebrain formation. FGF8 plays an important role in determining midbrain identity in the neural tube. These signaling molecules (WNT, FGF, RA) are involved in antero-posterior development. Dorso-ventral patterning of the neural tube occurs under two main opposing signals. Dorsal features are determined by BMP and sonic hedgehog (SHH) ventralizes the brain and spinal cord. Both these signals form gradients (BMP in orange and SHH in purple) in opposite direction. In the hindbrain and spinal cord RA generates inter-neurons.

A. In each model cells are differentiated in three steps for a varying time period ranging between 18-21 days.
Panel (a): hESC differentiation on adherent culture. This is done with/or without feeder cells. Usually, factors that promote neural differentiation are added to the medium. Commonly, retinoic acid (RA), BMP-inhibitors (such as, noggin) and other supplements (like N2, B27, ITS) are used in the culture. In a feeder-free system, hESC are plated on a variety of matrices such as laminin, fibronectin, collagen or Matrigel. If feeder cells are present in the culture, they are removed at around 10 days of differentiation. By this time, cells are committed to neural fates showing neural rosettes in culture. In the next step, cells are cultured with neural permissive medium and neural rosettes are passaged with the same medium that contains high amount of basic FGF (FGF2) and sometimes, EGF.
Panel (b): hESc differentiation in suspension culture. cells are grown in suspension to allow EB formation with or without FGF2 for a period varying between 1-2 weeks. During this time, cells randomly differentiate and the process stochastically generates many cell types. During EB formation, neural induction factors are also used. After this, differentiated cells are plated on adherent culture to selectively permit the growth of neural cells, and neural rosettes are manually passaged in neural permissive medium.
B. Neural progenitors generated by either of these methods can be maintained in culture for an unlimited time in the presence of high FGF2 and EGF. In culture they maintain characteristic morphology (bright field image, left panel) and show expression of NP-markers such as SOX2 (red in middle panel) and Nestin (in green, right). DAPI staining in blue indicates nuclei. These images are taken with neural progenitor line EnStem-A (Millipore) derived from WA09 hESC and maintained in neurobasal medium supplemented with FGF2 and B27.