Relatively little is known about the molecular events that specify the rostrocaudal axis of the neural plate. Here we show that a member of theDistal-less(Dlx) homeobox gene family,Dlx5, is one of the earliest known markers for the most rostral ectoderm, before the formation of an overt neural plate. During late gastrulationDlx5expression becomes localized to the anterior neural ridge, which defines the rostral boundary of the neural plate, and also extends caudolaterally, marking the region of the presumptive neural crest. Subsequently,Dlx5is expressed in tissues (olfactory epithelium, ventral cephalic epithelium) that are believed to derive from the anterior neural ridge, based on the avian fate map. The early phase ofDlx5expression in the anterior neural ridge and its derivatives is distinct from a later phase of expression in the ventral telencephalon and diencephalon and also appears to be unique forDlx5among members of theDlxfamily. Another distinctive feature ofDlx5expression is the occurrence of an alternative transcript (δDlx5), which encodes a truncated protein lacking the homeodomain, and represents a significant fraction of totalDlx5transcripts at all embryonic stages that were examined. In contrast with full-length DLX5, the δDLX5 truncated protein is deficient in DNA-binding activity and does not interact with the homeoprotein partner MSX1. Taken together, our findings suggest thatDlx5activity may be regulated via the expression of an alternative transcript and demonstrate thatDlx5marks the anterior boundary of the neural plate.