The segmental pattern of peripheral ganglia in higher vertebrates is generated by interactions between neural crest and somite cells. Each mesodermal somite is subdivided into at least two distinct domains represented by its rostral and caudal halves. Most migratory pathways taken by neural crest cells in trunk regions of the axis, as well as the outgrowth of motoneuron fibers are restricted to the rostral domain of each somite. Experimental modification of the somites, achieved by constructing a mesoderm composed of multiple rostral half-somites, results in the formation of continuous and unsegmented nerves, dorsal root ganglia (DRG) and sympathetic ganglia (SG). In contrast, both neurites and crest cells are absent from a mesoderm composed of multiple-caudal half somites. However, the mechanisms responsible for gangliogenesis within the rostral half of the somite, appear to be different for DRG and SG. Vertebral development from the somites is also segmental. In implants of either multiple rostral or caudal somite-halves, the grafted mesoderm dissociates normally into sclerotome and dermomyotome. However, the morphogenetic capabilities of each somitic half differ. The lateral vertebral arch is continuous in the presence of caudal half-somite grafts and is virtually absent in rostral half-somite implants. Therefore, the rostrocaudal subdivision of the sclerotome determines the segmental pattern of neural development and is also important for the proper metameric development of the vertebrae.