The curly tail (ct/ct) mouse mutant shows a high frequency of delay or failure of neural tube closure, and is a good model for human neural tube defects, particularly spina bifida. In a previous study we defined distinct domains of gene expression in the caudal region of non-mutant embryos during posterior (caudal) neuropore closure (Gofflot et al. Developmental Dynamics 210, 431–445, 1997). Here we use BrdU incorporation into S-phase nuclei to investigate the relationship between cell proliferation and the previously described gene expression domains in ct/ct mutant embryos. The BrdU-immunostained sections were also examined for abnormalities of tissue structure; immunohistochemical detection of perlecan (an extracellular heparan sulphate proteoglycan) was used as an indicator of neuroepithelial basement membrane structure and function. Quantitation of BrdU uptake revealed that at early stages of neurulation, cell proliferation was specifically reduced in the paraxial mesoderm of all ct/ct embryos compared with wild type controls, but at later stages (more cranial levels) it was increased. Those ct/ct embryos with enlarged posterior neuropore (indicating delay of closure) additionally showed an increased BrdU labelling index within the open neuroepithelium at all axial levels; however, this tissue was highly abnormal with respect to cell and nuclear morphology. It showed cell death and loss of cells from the apical surface, basement membrane defects including increased perlecan immunoreactivity, and increased separation from the underlying mesenchyme and notochord. These observations suggest that the mechanism of delay or failure of neuroepithelial curvature that leads to neural tube defects in curly tail embryos involves abnormalities of neuroepithelial-mesenchymal interactions that may be initiated by abnormal cellular function within the neuroepithelium. Minor histological and proliferation abnormalities are present in all ct/ct embryos, regardless of phenotype.