Rohon-Beard sensory neurons, neural crest cells, and sensory placodes can be distinguished at the boundary of the embryonic epidermis (skin) and the neural plate. The inductive signals at the neural plate border region are likely to involve a gradient of bone morphogenic protein (BMP) in conjunction with FGF and Wnts and other signals. However, how these signals are transduced to produce the final cell fate remains to be determined. Recent evidence from Xenopus and chick suggest that Dlx genes are required for the generation of cell fates at the neural plate border (McLarren, K.W., Litsiou, A., Streit, A., 2003. DLX5 positions the neural crest and preplacode region at the border of the neural plate. Dev. Biol. 259, 34-47; Woda, J.M., Pastagia, J., Mercola, M., Artinger, K.B., 2003. Dlx proteins position the neural plate border and determine adjacent cell fates. Development 130, 331-342). In the present study, we extend these findings to zebrafish, where we unequivocally demonstrate that dlx3b and dlx4b function in a dose-dependent manner to specify cell fates such as Rohon-Beard sensory neurons and trigeminal sensory placodes. dlx function was examined by inhibiting: (1) protein levels with antisense morpholino oligonucleotides (MOs), and (2) activity by repressing the ability of dlx-homeodomain to bind to downstream targets (EnR-dlx3bhd mRNA; dlx3b homeodomain fused to Engrailed transcriptional repressor domain). Inhibition of dlx3b and dlx4b protein and activity resulted in the reduction or complete loss of Rohon-Beard (RB) sensory neurons and trigeminal (TG) sensory placodes. These data suggest that dlx3b and dlx4b function in the specification of RB neurons and trigeminal sensory placodes in zebrafish. Further, we have shown that dlx3b and dlx4b function in a non-cell-autonomous manner for RB neuron development; dlx3b and dlx4b act to regulate bmp2b expression at the non-neural ectodermal border. These data suggest that the contribution of dlx3b and dlx4b to neural plate border formation is partially non-cell-autonomous acting via BMP activity.