Placodes are discrete regions of thickened ectoderm that contribute extensively to the peripheral nervous system in the vertebrate head. The paired-domain transcription factor Pax-3 is an early molecular marker for the avian ophthalmic trigeminal (opV) placode, which forms sensory neurons in the ophthalmic lobe of the trigeminal ganglion. Here, we use collagen gel cultures and heterotopic quail-chick grafts to examine the competence, specification and induction of Pax-3 in the opV placode. At the 3-somite stage, the whole head ectoderm rostral to the first somite is competent to express Pax-3 when grafted to the opV placode region, though competence is rapidly lost thereafter in otic-level ectoderm. Pax-3 specification in presumptive opV placode ectoderm occurs by the 8-somite stage, concomitant with robust Pax-3 expression. From the 8-somite stage onwards, significant numbers of cells are committed to express Pax-3. The entire length of the neural tube has the ability to induce Pax-3 expression in competent head ectoderm and the inductive interaction is direct. We propose a detailed model for Pax-3 induction in the opV placode.