Many fundamental issues in developing neurobiology relate to the origins and maintenance of modular patterning in the nervous system. Both in the hindbrain and in the forebrain, regulation of multicellular compartments are being found to play an essential role in development and pattern formation. The striatum, the largest subcortical structure of the mammalian forebrain, offers a promising system for studying compartment formation in the forebrain. It contains neurochemically distinct macroscopic compartments, striosomes and matrix, that have different schedules of neurogenesis, connection formation and transmitter-related neurochemical specification. Determining the mechanisms underlying the formation of these striosome/matrix compartments is the core issue addressed by most of the experiments proposed. We propose to test hypotheses about the roles of selective cell-cell adhesion, striatal connection formation, and local antigen expression in the formation of striatal compartments. These experiments will involve some normative studies of developmental marker expression, but most will employ neuronal grafting and organotypic slice cultures. Together, these experiments should not only help to identify conditions leading to compartment formation in the striatum but also help to establish model in vivo and in vitro systems with which the molecular events underlying compartment formation can be identified.