We have isolated the Xenopus p21-activated kinase 3 (XPak3) by virtue of its expression in the territory of primary neurogenesis in the developing embryo. XPak3, but not the other Pak variants, responds positively to X-Ngnr-1 and negatively to X-Notch-1. A constitutively active form of XPak3, generated by fusing a myristylation signal to the N-terminus (XPak3-myr), induces early cell cycle arrest at high concentrations, while ectopic expression of low amounts induces premature neuronal differentiation. Conversely, XPak3 loss of function achieved by use of an antisense morpholino oligonucleotide increases cell proliferation and inhibits neuronal differentiation; this phenotype is rescued by co-injection of XPak3-myr. We conclude that XPak3 is a novel member of the proneural pathway, functioning downstream of neurogenin to withdraw neuronally programmed cells from the mitotic cell cycle, thus allowing for their differentiation.