In studies of the central nervous system (CNS) few areas have progressed faster than the study of transcription factors and their role in controlling gene expression during development. Evidence for the pivotal roles of these factors in the formation of the CNS is reviewed; from neural induction to the maturation of neurons and the specification of cells according to their position within the CNS. In all of these processes, epigenetic factors affect the cells' developmental fate but it is transcription factors within the cells which function both to decode these incoming messages and then to effect changes in the expression of other genes. Soluble factors such as retinoic acid and the products of the Noggin and Sonic hedgehog genes induce changes in families of transcription factors such as the Hox, Sox, Pax and Pou gene products and these alter the expression of banks of downstream genes thereby controlling the developmental fate of those cells. Recent advances in understanding of the molecular events underlying normal neurogenesis might now lead to a clearer understanding of the molecular abnormalities underlying several developmental disorders of the CNS.