Development of the somite-derived dermatome involves conversion of the epithelial dermatome progenitors into mesenchymal cells of the dermis. In chick embryos, neural tube-derived signals are required for this conversion, as the interposition of a membrane between neural tube and somites results in a failure of the dermatome to lose its epithelial arrangement. However, dermis formation can be completely rescued by coating the membranes with Neurotrophin-3, but not with the related molecule Nerve growth factor. Neurotrophin-3 was also found to be necessary for dermatome dissociation using in vitro explants or partially dissociated dermomyotomes. The functional relevance of these observations was investigated by neutralizing endogenous Neurotrophin-3 using a specific blocking antibody. Antibody-treated embryos revealed the presence of tightly aggregated cells between myotome and ectoderm instead of the loose dermal mesenchyme observed in embryos treated with control antibodies. As previous studies have demonstrated the presence of Neurotrophin-3 in the neural tube, these results suggest that it may be a necessary neural tube-derived signal required for early stages of dermis formation.