The paraxial mesoderm is a layer of mesoderm located on either side of the notochord during early embryonic development. It plays a crucial role in forming structures such as somites, which eventually develop into the vertebrae, muscles, and dermis of the skin. As the embryo grows, the paraxial mesoderm segments into paired blocks called somites. Each somite differentiates into specific tissues, contributing to the overall organization of the body plan. This process is essential for proper development and alignment of the nervous system and musculoskeletal system.