To isolate novel genes regulating neural induction, we used a DNA microarray approach. As neural induction is thought to occur by means of the inhibition of bone morphogenetic protein (BMP) signaling, BMP signaling was inhibited in ectodermal cells by overexpression of a dominant-negative receptor. RNAs were isolated from control animal cap explants and from dominant-negative BMP receptor expressing animal caps and subjected to a microarray experiment using newly generated high-density Xenopus DNA microarray chips representing over 17,000 unigenes. We have identified 77 genes that are induced in animal caps after inhibition of BMP signaling, and all of these genes were subjected to whole-mount in situ hybridization analysis. Thirty-two genes showed specific expression in neural tissues. Of the 32, 14 genes have never been linked to neural induction. Two genes that are highly induced by BMP inhibition are inhibitors of Wnt signaling, suggesting that a key step in neural induction is to produce Wnt antagonists to promote anterior neural plate development. Our current analysis also proves that a microarray approach is useful in identifying novel candidate factors involved in neural induction and patterning. Developmental Dynamics 232:432–444, 2005. © 2004 Wiley-Liss, Inc.