To define the timing of neural crest formation, we challenged the fate of presumptive neural crest cells by grafting notochords, Sonic Hedgehog- (Shh) or Noggin-secreting cells at different stages of neurulation in chick embryos. Notochords or Shh-secreting cells are able to prevent neural crest formation at open neural plate levels, as assayed by DiI-labeling and expression of the transcription factor, Slug, suggesting that neural crest cells are not committed to their fate at this time. In contrast, the BMP signaling antagonist, Noggin, does not repress neural crest formation at the open neural plate stage, but does so if injected into the lumen of the closing neural tube. The period of Noggin sensitivity corresponds to the time when BMPs are expressed in the dorsal neural tube but are down-regulated in the non-neural ectoderm. To confirm the timing of neural crest formation, Shh or Noggin were added to neural folds at defined times in culture. Shh inhibits neural crest production at early stages (0-5 hours in culture), whereas Noggin exerts an effect on neural crest production only later (5-10 hours in culture). Our results suggest three phases of neurulation that relate to neural crest formation: (1) an initial BMP-independent phase that can be prevented by Shh-mediated signals from the notochord; (2) an intermediate BMP-dependent phase around the time of neural tube closure, when BMP-4 is expressed in the dorsal neural tube; and (3) a later pre-migratory phase which is refractory to exogenous Shh and Noggin.