Proopomelanocortin (POMC) is the precursor protein for a number of peptide hormones and neuropeptides, and the POMC gene is transcriptionally very active in the pars intermedia of the pituitary of the amphibian Xenopus laevis (Xenopus). We analysed the expression of this gene during Xenopus embryogenesis, in order to examine whether it can function as a (novel) neural marker. We investigated the spatio-temporal distribution of POMC mRNA, using a single-stranded probe that corresponds to the 3' untranslated region of Xenopus POMC gene B mRNA. Gene transcripts were first detected at stage 25 of development via RNase protection assays. In situ hybridization analysis performed at stage 46 showed clearly that these transcripts are localised in a region representing the future pars intermedia of the pituitary. Experiments using Xenopus explants indicate that the POMC gene can be used successfully as an indirect marker in studies on neural induction: in the absence of interactions with mesoderm, ectoderm fails to express the POMC gene, whereas POMC transcripts are readily detectable in conjugates of ectoderm and mesoderm. Artificial application of two different signals, which are likely to be relevant for neural differentiation (namely retinoic acid and the activation of protein kinase C via phorbol ester), was not effective in evoking POMC gene expression in cultured ectoderm explants. However, retinoic acid treatment of conjugates of Xenopus ectoderm and mesoderm successfully prevented POMC expression. We conclude that POMC gene expression can be used as an indirect marker for anterior neural differentiation in Xenopus.