We have analysed the distribution of cellular retinol-binding protein (CRBP) and cellular retinoic acid-binding protein (CRABP) in the day 8.5-day 12 mouse and rat embryo. CRBP is localised in the heart, gut epithelium, notochord, otic vesicle, sympathetic ganglia, lamina terminalis of the brain, and, most strikingly, in a ventral stripe across the developing neural tube in the future motor neuron region. This immunoreactivity remains in motor neurons and, at later stages, motor axons are labelled in contrast to unlabelled sensory axons. CRABP is localised to the neural crest cells, which are particularly noticeable streaming into the branchial arches. At later stages, neural crest derivatives such as Schwann cells, cells in the gut wall and sympathetic ganglia are immunoreactive. An additional area of CRABP-positive cells are neuroblasts in the mantle layer of the neural tube, which subsequently appear to be the axons and cell bodies of the commissural system. Since retinol and retinoic acid are the endogenous ligands for these binding proteins, we propose that retinoids may play a role in the development and differentiation of the mammalian nervous system and may interact with certain homoeobox genes whose transcripts have also been localised within the nervous system.