This article is concerned with the idea that neural precursor cells in vertebrates can self-renew and give rise to all cell types within the nervous system. Supportive evidence for this notion of neural stem cells comes from clonal analyses undertaken both in vivo and in vitro. Neural stem cells also give rise to other cells in the body, including skin melanocytes and a range of mesenchymal cells in the head and neck. What determines the fate of these stem cells is their initial location within the developing neural tube and their final location post migration from the proliferative zone of the neural tube. A population of cells in the adult brain also have the characteristics of classical stem cells, a finding that opens the way for potential replacement therapy in nervous system-degenerative diseases. Much of the work in our laboratory has been concerned with the regulation of expansion and differentiation of these cells into their myriad progeny and the role of a series of various growth factors in this process. Different factors, such as members of the fibroblast growth factor family, act at different times to regulate stem cell proliferation and differentiation. Some factors, including members of the TGF beta superfamily, appear to be directly involved in the specification of cell fate. Finally, we are beginning to be able to determine the steps in the development of some lineages from multipotential stem cell to fully functional differentiated cell.