A mounting body of evidence suggests that cell-cell adhesion molecules (CAMs) play critical roles in morphogenetic patterning and in laying down the initial tissue scaffold of the nervous system. Perturbations of CAM binding can lead to altered tissue pattern and interruption of tissue interactions to altered patterns of CAM expression. The combined factors that regulate the expression of CAMs and that drive early neural development are, however, largely unknown. We have hypothesized that the coordinate expression of homeobox (Hox) and paired box (Pax) transcription factors in various axes of the body plan leads to differential expression of particular CAM genes. Following this hypothesis, we have characterized the promoters and other regulatory regions of a number of genes specifying CAMs and have identified cis-regulatory elements that bind and respond to Hox and Pax proteins. Our recent experiments in vitro indicate, for example, that transcription factors encoded by Hox and Pax genes bind to specific DNA sequences in the N-CAM promoter and activate expression of the N-CAM gene. Experiments on transgenic mice carrying either the wild-type N-CAM promoter or a variant with mutations in the homeodomain binding sites (HBS) linked to a lac-Z reporter gene indicate that interactions with these elements are important in establishing and maintaining N-CAM expression in the spinal cord. We have also examined the regulatory sequences controlling expression of the gene for the neuron-glia adhesion molecule (Ng-CAM). Unlike N-CAM, which is also expressed in many non-neural sites, Ng-CAM is restricted to cells of the nervous system. After identifying this promoter for the Ng-CAM gene, we characterized a silencer region in the first intron of the gene that extinguishes the expression of Ng-CAM in fibroblasts but not in neuronal cells. Thus, a default mechanism can account for the restriction of Ng-CAM expression to the nervous system. The silencer region contains five neural-restrictive silencer elements and a binding site for the Pax3 protein, which also appears to have silencing activity. All of these findings suggest that Hox and Pax transcription factors can have both activating and silencing functions in regulating CAM gene expression. The general significance of these accumulated observations is that they connect the place-dependent expression of gene products capable of direct morphoregulation to the function of pattern-forming genes.