ABSTRACT Ectodermal sandwiches of Ambystoma mexicanum of stage (Harrison) containing anterior notochord as inductor were treated with a 0·05 M LiCl solution for 24 hr. It was found that lithium was capable of changing the neural induction pattern of these explants by increasing the number of rhombencephalic and spino-cordal inductions and decreasing the number of prosencephalic ones. Sandwiches made from ectoderm of various developmental stages (stages 8 –12) and not containing an inductor were treated with the lithium solution for 2- or 24-hr. periods. In the explants made with ectoderm of stage 8, stage 9 or stage a very characteristic type of cell displacement occurred which resembled the phenomenon of exogastrulation. The ectoderm of the younger stages was shown to be mesodermalized and entodermalized to a considerable extent by the treatment. The period of mesodermal competence of the ectoderm, as judged by its reactivity towards lithium, extends from stage 8 (or earlier) up to stage (Harrison). The different periods of primary competence for (a) meso- and ento-dermalization, and (b) activation (neuralization) of the ectoderm are considered. Also the subsequently acquired competence for (c) transformation (caudalization) of the activated ectoderm into more caudal neural structures is discussed. The various periods of competence are presented in the form of a diagram together with the corresponding inductive stimuli.