Neurogenesis in Xenopus neural ectoderm involves multiple gene families, including basic helix-loop-helix transcription factors, which initiate and control primary neurogenesis. Equally important, though less well understood, are the downstream effectors of the activity of these transcription factors. We have investigated the role of a candidate downstream effector, Noelin-1, during Xenopus development. Noelin-1 is a secreted glycoprotein that likely forms large multiunit complexes. In avians, overexpression of Noelin-1 causes prolonged and excessive neural crest migration. Our studies in Xenopus reveal that this gene, while highly conserved in sequence, has a divergent function in primary neurogenesis. Xenopus Noelin-1 is expressed mainly by postmitotic neurogenic tissues in the developing central and peripheral nervous systems, first appearing after neural tube closure. Its expression is upregulated in ectopic locations upon overexpression of the neurogenic genes X-ngnr-1 and XNeuroD. Noelin-1 expression in animal caps induces expression of neural markers XBrn-3d and XNeuroD, and co-expression of secreted Noelin-1 with noggin amplifies noggin-induced expression of XBrn-3d and XNeuroD. Furthermore, in animal caps neuralized by expression of noggin, co-expression of Noelin-1 causes expression of neuronal differentiation markers several stages before neurogenesis normally occurs in this tissue. Finally, only secreted forms of the protein can activate sensory marker expression, while all forms of the protein can induce early neurogenesis. This suggests that the cellular localization of Noelin-1 may be important to its function. Thus, Noelin-1 represents a novel secreted factor involved in neurogenesis.