In developing vertebrate embryos, Pax3 is expressed in the neural tube and in the paraxial mesoderm that gives rise to skeletal muscles. Pax3 mutants develop muscular and neural tube defects; furthermore, Pax3 is essential for the proper activation of the myogenic determination factor gene, MyoD, during early muscle development and PAX3 chromosomal translocations result in muscle tumors, providing evidence that Pax3 has diverse functions in myogenesis. To investigate the specific functions of Pax3 in development, we have examined cell survival and gene expression in presomitic mesoderm, somites and neural tube of developing wild-type and Pax3 mutant (Splotch) mouse embryos. Disruption of Pax3 expression by antisense oligonucleotides significantly impairs MyoD activation by signals from neural tube/notochord and surface ectoderm in cultured presomitic mesoderm (PSM), and is accompanied by a marked increase in programmed cell death. In Pax3 mutant (Splotch) embryos, MyoD is activated normally in the hypaxial somite, but MyoD-expressing cells are disorganized and apoptosis is prevalent in newly formed somites, but not in the neural tube or mature somites. In neural tube and somite regions where cell survival is maintained, the closely related Pax7 gene is upregulated, and its expression becomes expanded into the dorsal neural tube and somites, where Pax3 would normally be expressed. These results establish that Pax3 has complementary functions in MyoD activation and inhibition of apoptosis in the somitic mesoderm and in repression of Pax7 during neural tube and somite development.