The neural plate becomes a neural groove. Rapid cell proliferation at the margins of the neural plate alter its configuration so that a midline neural groove forms between neural folds, which gradually deepens. The elevated margins of the neural folds grow toward each other and will finally fuse to form a neural tube. Cells lining the groove are neuroepithelial cells which ultimately give rise to all the cells of the CNS. The anterior end of the neural plate enlarges and will form the brain while the caudal portion of the neural plate will form the spinal cord. The cavity of the developing neural tube is destined to become the ventricular system.

Ectoderm at the margins of the neural folds represent cells destined to become neural crest cells that will give rise to the main elements of the peripheral nervous system. As the neural groove/tube continues to develop, the primitive streak becomes less conspicuous.

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