Development of somite cells is orchestrated by two regulatory processes. Differentiation of cells from the various somitic compartments into different anlagen and tissues is regulated by extrinsic signals from neighboring structures such as the notochord, neural tube, and surface ectoderm. Morphogenesis of these anlagen to form specific structures according to the segmental identity of each somite is specified by segment-specific positional information, based on the Hox-code. It has been shown that following experimental rotation of presomitic mesoderm or newly formed somites, paraxial mesodermal cells adapt to the altered signaling environment and differentiate according to their new orientation. In contrast, presomitic mesoderm or newly formed somites transplanted to different segmental levels keep their primordial segmental identity and form ectopic structures according to their original position. To determine whether all cells of a segment, including the dorsal and ventral compartment, share the same segmental identity, presomitic mesoderm or newly formed somites were rotated and transplanted from thoracic to cervical level. These experiments show that cells from all compartments of a segment are able to interpret extrinsic local signals correctly, but form structures according to their original positional information and maintain their original Hox expression in the new environment. Developmental Dynamics 233:1386–1393, 2005. © 2005 Wiley-Liss, Inc.