Dynamo, a new zebrafish DVR detected from late gastrula on in the posterior neural plate, becomes restricted to the ventral region of the trunk neural tube, with the exclusion of floor plate and adjacent cells. Analysis of dynamo expression in zebrafish axial mutants indicated that dynamo expression in the ventral region of the central nervous system (CNS) is induced by axial mesoderm and maintained by notochord, but is independent of a differentiated floor plate. Ectopic Sonic hedgehog (shh) expression can up-regulate dynamo expression in the posterior neural tube providing evidence that cells of the posterior neural tube are competent to respond to shh signalling and that the close relationship between DVR members and hedgehog-related genes might also apply to vertebrate CNS development.