Investigating the developmental organization of the embryonic nervous system has been one of the major challenges in neuroscience. Despite their significance, functional studies of the vertebrate embryonic CNS have been hampered, since conventional electrophysiological means have some technical limitations. First, early embryonic neurons are small and fragile, and the application of microelectrodes is often difficult. Second, the simultaneous recording of electrical activity from multiple sites is limited, and as a consequence, spatio-temporal patterns of neural network responses cannot be assessed. The advent of optical techniques using voltage-sensitive dyes has enabled the non-invasive monitoring of electrical activity in living cells and also facilitated the simultaneous recording of neural responses from multiple regions. Using optical recording techniques, it is now possible to follow the functional organization of the embryonic nervous system and to image the spatio-temporal dynamics of the neural network’s formation. Here, we present recent progress in optical studies on the embryonic nervous system with special emphasis on methodological considerations and the study of neuronal circuit formation, which demonstrates the utility of fast voltage-sensitive dye imaging as a powerful tool for elucidating the functional organization of the embryonic CNS.