Primary neurogenesis in the central nervous system of insects and vertebrates occurs in three dorsoventral domains in each side of the neuroectoderm. Among the three dorsoventral domains of the Drosophila neuroectoderm, the medial and lateral columns express the zinc-finger gene escargot (esg), whereas the intermediate column does not. We studied esg expression as a probe to investigate the mechanism of neuroectoderm patterning.The effect of dorsoventral patterning genes on esg expression was studied. decapentaplegic, snail and twist were found to repress esg expression outside the neuroectoderm. The expression of esg in the intermediate column is normally repressed, but was de-repressed when the EGF receptor homologue (DER) activity was either elevated or reduced. A neurogenic enhancer of esg was identified, and was shown to be separable into a distal region that promotes ubiquitous expression in the neuroectoderm and a proximal region that represses the intermediate expression.decapentaplegic, snail, twist and an activator act through the distal region to initiate transcription of esg in the neuroectoderm. We propose that the combination of opposing gradients of DER and its ligand creates a peak of DER activity in the intermediate column where DER represses esg transcription through the proximal repressor region. These two kinds of regulation establish the early esg expression that prefigures the neuroectoderm patterning.