It was previously shown (Roberts, C., Platt, N., Streit, A., Schachner, M. and Stern, C. D. (1991) Development 112, 959-970) that grafts of Hensen's node into chick embryos enhanced and maintain expression of the L5 carbohydrate in neighbouring epiblast cells, and that antibodies against L5 inhibit neural induction by such a graft. We now show that L5 is initially widely expressed in the epiblast, but as neural induction proceeds it gradually becomes confined to and up-regulated in the early neural plate. L5 can therefore be considered as a marker for cells that are competent to respond to neural induction. We also show that Hepatocyte Growth Factor/Scatter Factor (HGF/SF) promotes the expression of L5 by extraembryonic epiblast in collagen gels after overnight culture. Explants cultured for several days in the presence of HGF/SF, as well as explants of prospective neural plate, can differentiate into cells with neuronal morphology expressing neuronal markers. To investigate whether HGF/SF is expressed in the chick embryo at appropriate stages of development, we produced specific cDNA probes and used them for in situ hybridization. We find that at the primitive streak stage, HGF/SF is expressed specifically in Hensen's node. We therefore propose that HGF/SF plays a role during the early steps of neural induction, perhaps by inducing or maintaining the competence of the epiblast to respond to neural inducing signals.