The sensory nervous system in the vertebrate head arises from two cell populations: the neural crest cells and the placodal cells. So how do multipotent head ectodermal cells decide between these fates? Litsiou et al. now report on p. 4051that WNT signalling is crucial in this process, as it promotes neural crest generation over sensory placode formation. From their studies in chick embryos, the authors provide important new insights into the complex process of placode formation and positioning, which, they suggest, is controlled by a balance of signals that emanate from surrounding tissues. For example, while neural-crest-promoting WNT and BMP signals are produced from the neural folds,counterbalancing BMP and WNT antagonists are secreted by the head mesoderm to protect placode precursors from the inhibitory effects of this signalling. FGF signalling also has crucial roles at early and late stages in this process.