Vertebrate body axis extension involves progressive generation and subsequent differentiation of new cells derived from a caudal stem zone; however, molecular mechanisms that preserve caudal progenitors and coordinate differentiation are poorly understood. FGF maintains caudal progenitors and its attenuation is required for neuronal and mesodermal differentiation and to position segment boundaries. Furthermore, somitic mesoderm promotes neuronal differentiation in part by downregulating Fgf8. Here we identify retinoic acid (RA) as this somitic signal and show that retinoid and FGF pathways have opposing actions. FGF is a general repressor of differentiation, including ventral neural patterning, while RA attenuates Fgf8 in neuroepithelium and paraxial mesoderm, where it controls somite boundary position. RA is further required for neuronal differentiation and expression of key ventral neural patterning genes. Our data demonstrate that FGF and RA pathways are mutually inhibitory and suggest that their opposing actions provide a global mechanism that controls differentiation during axis extension.

Construction of the trunk/caudal region of the vertebrate embryo involves a set of distinct molecules and processes whose relationships are just coming into focus. In addition to the subdivision of the embryo into head and trunk domains, this "caudalisation" process requires the establishment and maintenance of a stem zone. This sequentially generates caudal tissues over a long period which then undergo differentiation and patterning in the extending body axis. Here we review recent studies that show that changes in the signalling properties of the paraxial mesoderm act as a switch that controls onset of differentiation and pattern in the spinal cord. These findings identify distinct roles for different caudalising factors; in particular, Fibroblast Growth Factor (FGF) inhibits differentiation in the caudal stem zone, while Retinoic acid (RA) provided rostrally by somitic mesoderm is required for neuronal differentiation and establishment of ventral neural pattern. Furthermore, the mutual opposition of FGF and RA pathways controls not only neural differentiation but also mesoderm segmentation and might also underlie the progressive assignment of rostrocaudal identity by regulating Hox gene availability and activation.

In Drosophila imaginal wing discs, the achaete-scute (ac-sc) proneural genes and rhomboid (veinlet) are expressed in highly resolved patterns that prefigure the positions of sensory organs and wing veins, respectively. It is thought that these patterns are generated by a combination of factors (a prepattern) regulating these genes. We provide evidence for the existence of this prepattern by identifying two of its factors, Araucan and Caupolican. They are members of a novel family of homeoproteins, with homologs in vertebrates. Araucan and Caupolican, present in domains of the imaginal discs larger than those expressing ac-sc and rhomboid, are necessary for expression of these genes in the overlapping domains. Araucan and Caupolican appear to be positive, direct regulators of ac-sc.