A novel paired homeodomain protein, PHD1, that is most closely related to C. elegans unc-4 has been identified by a differential RT-PCR method. PHD1 is expressed in a narrow layer adjacent to the ventricular zone of the dorsal spinal cord, immediately following expression of MASH1 but preceding overt neuronal differentiation. Some cells coexpressing MASH1 and PHD1 can be seen, suggesting that these two genes are sequentially activated within the same lineage. In the olfactory sensory epithelium, PHD1 expression not only follows but is dependent upon MASH1 function, suggesting that PHD1 acts downstream of MASH1. A sequential action of bHLH and paired homeodomain proteins is apparent in other neurogenic lineages and may be a general feature of both vertebrate and invertebate neurogenesis.