Segments of primitive streak from donor quail embryos at stages of gastrulation and neurulation were transplanted heterotopically and isochronically to primitive streaks of host chick embryos. The subsequent movement and fate of grafted cells was determined using the quail nucleolar marker to define grafted cells. The pattern of movement of grafted cells depended on their new position within the primitive streak, not on their original position. When cells of cranial regions were placed more caudally, they moved to mesodermal subdivisions that were located lateral to those they would have populated if left in their original position. When caudal segments were placed more cranially, they moved to more medial mesodermal subdivisions. Whether the fate of grafted cells corresponded to their original location or their new location depended on both their level of origin and their new position. Cells from heterotopically transplanted Hensen's nodes, which migrated to the somitic and more lateral mesoderm, self‐differentiated notochords. Similarly, in some cases, heterotopically transplanted prospective somitic cells, which migrated to lateral plate mesoderm, formed ectopic somites. In other cases, however, grafted cells contributed to the host's somites, intermediate mesoderm, and lateral plate mesoderm. Moreover, prospective somitic cells, which migrated to the extraembryonic lateral plate mesoderm, changed their fate and formed extraembryonic lateral plate mesoderm; and prospective lateral plate mesoderm cells, which migrated to the somitic mesoderm, formed somites as well as intermediate mesoderm and lateral plate mesoderm. These results suggest that the movement of primitive streak cells to various mediolateral subdivisions of the mesodermal stream is determined solely by their craniocaudal position within the streak, but that determination of cell fate involves a combination of self‐differentiation and positional regulation. Cells from cranial levels of the primitive streak exhibit a considerably greater potential to self‐differentiate than those from more caudal levels, and cranial cells are more likely to migrate as a coherent group, unlike more caudal cells, which tend to freely disperse within host structures. © 1992 Wiley‐Liss, Inc.