Multiple assays for Shh activity using cell lines, primary cultures, and explanted tissue have been described. We first described the use of E11.5 rat dorsal telencephalic expiants to assay Shh ventralizing and differentiation- inducing activity in Kohtz et al. (1). Using this assay, we subsequently showed that N-lipid modification is critical for Shh activity in the telencephalon (2). In vivo assays for lipid-modified Shh support the results of our E11.5 telencephalic neural explant assay (2). More recently, the method of isolating telencephalic expiants was improved by an intraocular grid, increasing both its accuracy and reproducibility (3). Shh induces the expression of the following ventral telencephalic markers: MIASH-1, the Dlx's, and Islet 1/2. Therefore, this assay for Shh induction of GABAergic interneurons defines a competent, but naive region within the E11.5 dorsal telencephalon, allowing the study of GABAergic interneuron induction and differentiation from an unspecified progenitor population.