Retinoids — a family of molecules that are derived from vitamin A — have been implicated in many developmental processes. In the embryonic vertebrate central nervous system (CNS), retinoic acid (RA) has a role in patterning both the anteroposterior and dorsoventral axes. Initially, RA was thought to be involved in generating the entire anteroposterior extent of the CNS, but more recent experiments have identified its main sites of action as the hindbrain and anterior spinal cord. RA also regulates interneuron and motor neuron development along the dorsoventral axis. This review describes the studies that led to these conclusions, and discusses how understanding the mechanisms of RA action in the developing CNS might provide insights into neurological disease.