Transcription factor AP-2 has been shown to have important functions in the differentiation of neural crest cell and act as a key regulator of skin development. Here, we report that AP-2 mediates neural induction in Xenopus laevis. RT-PCR analysis revealed that AP-2 expression increased with the start of neural induction. Animal cap assay and AP-2 antisense RNA injection was done to study the functions of AP-2 in neural induction. bFGF and Noggin were used to neuralize stage 10 Xenopus ectoderm (animal cap). Being used alone or together, bFGF and Noggin induced ectoderm into neural tissue as confirmed by the expression of neural marker genes such as NACM, En2 and XlHbox6. No AP-2 expression was detected in the control animal caps cultured for 24 hours. However, animal caps treated with bFGF or Noggin strongly expressed AP-2. In the AP-2 antisense RNA injected embryo, the formation of neural tissue was inhibited. Together with our previous report that AP-2 strongly expressed in the notochord, present data suggest that AP-2 mediates neural induction and the fact that different neural inducers as bFGF and Noggin have same effects on the AP-2 expression indicates that AP-2 mediates downstream pathway of neural induction.