The large number of transcription factors, their diverse sequence-specific interactions with DNA sites and with other transcription factors, and their ability to be modified in response to a variety of environmental cues and intracellular signals provide combinatorial codes for highly complex and yet highly organized patterns of gene expression likely to underlie the determination of diversity of neuronal phenotypes. Subtle differences in the combinations of transcription factors are likely to have profound consequences for cell phenotype, similar to the mechanism involved in the specification of cell types in yeast (reviewed in Herskowitz, 1989). Although our current understanding of transcriptional regulation in the brain comes largely from phenomenological studies, recent technical progress on two fronts promises a bright future. Homologous recombination technology in embryonic stem cells (reviewed in Capecchi, 1989; Rossant, 1990) allows the disruption of particular genes in transgenic mice and definition of the roles of identified transcription factors in mammalian neurogenesis. A second technological advance, targeted tumorigenesis, has provided neuronal model cell lines (Mellon et al., 1990; reviewed in Cepko, 1988; McKay et al., 1988) that mimic certain neuronal differentiation pathways. These combined genetic, cell biological, and biochemical approaches will greatly facilitate the study of neural development and function.