Genes encoding transcription factors of the helix-loop-helix family are essential for the development of the nervous system in Drosophila and vertebrates. Screens of an embryonic chick neural cDNA library have yielded NeuroM, a novel neural-specific helix-loop-helix transcription factor related to the Drosophila proneural gene atonal. The NeuroM protein most closely resembles the vertebrate NeuroD and Nex1/MATH2 factors, and is capable of transactivating an E-box promoter in vivo. In situ hybridization studies have been conducted, in conjunction with pulse-labeling of S-phase nuclei, to compare NeuroM to NeuroD expression in the developing nervous system. In spinal cord and optic tectum, NeuroM expression precedes that of NeuroD. It is transient and restricted to cells lining the ventricular zone that have ceased proliferating but have not yet begun to migrate into the outer layers. In retina, NeuroM is also transiently expressed in cells as they withdraw from the mitotic cycle, but persists in horizontal and bipolar neurons until full differentiation, assuming an expression pattern exactly complementary to NeuroD. In the peripheral nervous system, NeuroM expression closely follows cell proliferation, suggesting that it intervenes at a similar developmental juncture in all parts of the nervous system. We propose that availability of the NeuroM helix-loop-helix factor defines a new stage in neurogenesis, at the transition between undifferentiated, premigratory and differentiating, migratory neural precursors.