N-cadherin (Ncad) is a classical cadherin that is implicated in several aspects of vertebrate embryonic development, including somitogenesis, heart morphogenesis, neural tube formation and establishment of left-right asymmetry. However, genetic in vivo analyses of its role during neural development have been rather limited. We report the isolation and characterization of the zebrafish parachute (pac) mutations. By mapping and candidate gene analysis, we demonstrate that pac corresponds to a zebrafish n-cadherin (ncad) homolog. Three mutant alleles were sequenced and each is likely to encode a non-functional Ncad protein. All result in a similar neural tube phenotype that is most prominent in the midbrain, hindbrain and the posterior spinal cord. Neuroectodermal cell adhesion is altered, and convergent cell movements during neurulation are severely compromised. In addition, many neurons become progressively displaced along the dorsoventral and the anteroposterior axes. At the cellular level, loss of Ncad affects beta-catenin stabilization/localization and causes mispositioned and increased mitoses in the dorsal midbrain and hindbrain, a phenotype later correlated with enhanced apoptosis and the appearance of ectopic neurons in these areas. Our results thus highlight novel and crucial in vivo roles for Ncad in the control of cell convergence, maintenance of neuronal positioning and dorsal cell proliferation during vertebrate neural tube development.