The ectoderm gives rise to both neural tissue and epidermis. In vertebrates, specification of the neural plate requires repression of bone morphogenetic protein (BMP) signaling in the dorsal ectoderm. The extracellular BMP antagonist Chordin and other signals from the dorsal mesoderm play important roles in this process. We utilized zebrafish mutant combinations that disrupt Chordin and mesoderm formation to reveal additional signals that contribute to the establishment of the neural domain. We demonstrate that fibroblast growth factor (FGF) signaling accounts for the additional activity in neural specification. Impeding FGF signaling results in a shift of ectodermal markers from neural to epidermal. However, following inhibition of FGF signaling, expression of anterior neural markers recovers in a Nodal-dependent fashion. Simultaneously blocking, Chordin, mesoderm formation, and FGF signaling eliminates neural marker expression during gastrula stages. We observed that FGF signaling is required for chordin expression but that it also acts via other mechanisms to repress BMP transcription during late blastula stages. Activation of FGF signaling was also able to repress BMP transcription in the absence of protein synthesis. Our results support a model in which specification of anterior neural tissue requires early FGF-mediated repression of BMP transcript levels and later activities of Chordin and mesodermal factors.