Atrial natriuretic peptide (ANP) binding sites have been detected in the embryonic brain, but the specific receptor subtypes and biological functions for ANP family ligands therein remain undefined. We now characterize the patterns of gene expression for the natriuretic peptides [ANP, brain natriuretic peptide (BNP), type-C natriuretic peptide (CNP)] and their receptors (NPR-A, NPR-B, NPR-C) at several early stages in the embryonic mouse nervous system by in situ hybridization, and begin to define the potential developmental actions using cell culture models of peripheral (PNS) and central nervous systems (CNS). In the CNS, gene transcripts for CNP were present at the onset of neurogenesis, embryonic day 10.5 (E10.5), primarily in the dorsal part of the ventricular zone (VZ) throughout the hindbrain and spinal cord. On E14.5, new CNP signals were observed in the ventrolateral spinal cord where motor neurons reside, and in bands of cells surrounding the spinal cord and hindbrain, localized to dura and/or cartilage primordia. ANP and BNP gene transcripts were not detected in embryonic brain, but were highly abundant in the heart. The CNP-specific receptor (NPR-B) gene was expressed in cells just outside the VZ, in regions where post-mitotic neurons are differentiating. Gene expression for NPR-C, which recognizes all natriuretic peptides, was present in the roof plate of the hindbrain and spinal cord and in bilateral stripes just dorsolateral to the floor plate at E12.5. In the PNS, NPR-B and NPR-C transcripts were highly expressed in dorsal root sensory (DRG) and cranial ganglia beginning at E10.5, with NPR-C signal also prominent in adjoining nerves, consistent with Schwann cell localization. In contrast, NPR-A gene expression was undetectable in neural tissues.To define ontogenetic functions, we employed embryonic DRG and hindbrain cell cultures. The natriuretic peptides potently stimulated DNA synthesis in neuron-depleted as well as neuron-containing Schwann cell cultures and differentially inhibited neurite outgrowth in DRG sensory neuron cultures. CNP also exhibited modest survival-promoting effects for sensory neurons. In marked contrast to PNS effects, the peptides inhibited proliferation of neural precursor cells of the E10.5 hindbrain. Moreover, CNP, alone and in combination with sonic hedgehog (Shh), induced the expression of the Shh target gene gli-1 in hindbrain cultures, suggesting that natriuretic peptides may also modify patterning events in the embryonic brain. These studies reveal widespread, but discrete patterns of natriuretic peptide and receptor gene expression in the early embryonic nervous system, and suggest that the peptides play region- and stage-specific roles during the development of the peripheral and central nervous systems.