Cranial placodes contribute to many sensory organs and ganglia of the vertebrate head. The olfactory, otic, and lateral line placodes form the sensory receptor cells and neurons of the nose, ear, and lateral line system; the lens placode develops into the lens of the eye; epibranchial, profundal, and trigeminal placodes contribute sensory neurons to cranial nerve ganglia; and the adenohypophyseal placode gives rise to the anterior pituitary, a major endocrine control organ. Despite these differences in fate, all placodes are now known to originate from a common precursor, the preplacodal ectoderm (PPE). The latter is a horseshoe-shaped domain of ectoderm surrounding the anterior neural plate and neural crest and is defined by expression of transcription factor Six1, its cofactor Eya1, and other members of the Six and Eya families. Studies in zebrafish, Xenopus, and chick reveal that the PPE is specified together with other ectodermal territories (epidermis, neural crest, and neural plate) during early embryogenesis. During gastrulation, domains of ventrally (e.g., Dlx3/Dlx5, GATA2/GATA3, AP2, Msx1, FoxI1, and Vent1/Vent2) and dorsally (e. g., Zic1, Sox3, and Geminin) restricted transcription factors are established in response to a gradient of BMP and help to define non-neural and neural competence territories, respectively. At neural plate stages, the PPE is then induced in the non-neural competence territory by signals from the adjacent neural plate and mesoderm including FGF, BMP inhibitors, and Wnt inhibitors. Subsequently, signals from more localized signaling centers induce restricted expression domains of various transcription factors within the PPE, which specify multiplacodal areas and ultimately individual placodes. (C) 2014 Wiley Periodicals, Inc.