During vertebrate embryogenesis, the formation of the nervous system from the ectoderm begins with neural induction, a process that involves the inhibition of BMP signalling. The resultant neuroectoderm cells proliferate briefly before differentiating into neural cells. But what stimulates this proliferation and is it essential for neural differentiation? Ueno and co-workers now report that the Forkhead transcription factor FoxM1 is required for both proliferation and differentiation of neural precursors in early Xenopus embryos (see p. 2023). They show that FoxM1 expression in the neuroectoderm is required for cell division in this embryonic region, and that BMP inhibition induces the expression of FoxM1 and also of the cell-cycle regulators it targets. Importantly, they show that FoxM1-dependent cell division is required for neuronal differentiation but not for the specification of the neuroectoderm. These results reveal how cell division and neuronal differentiation are linked in early Xenopusembryos, but also suggest that BMP signalling may regulate cell proliferation,as well as cell fate, in many developmental situations.