Expression of the transcription factor zic1 at the onset of gastrulation is one of the earliest molecular indicators of neural fate determination in Xenopus. Inhibition of bone morphogenetic protein (BMP) signaling is critical for activation of zic1 expression and fundamental for establishing neural identity in both vertebrates and invertebrates. The mechanism by which interruption of BMP signaling activates neural-specific gene expression is not understood. Here, we report identification of a 215 bp genomic module that is both necessary and sufficient to activate Xenopus zic1 transcription upon interruption of BMP signaling. Transgenic analyses demonstrate that this BMP inhibitory response module (BIRM) is required for expression in the whole embryo. Multiple consensus binding sites for specific transcription factor families within the BIRM are required for its activity and some of these regions are phylogenetically conserved between orthologous vertebrate zic1 genes. These data suggest that interruption of BMP signaling facilitates neural determination via a complex mechanism, involving multiple regulatory factors that cooperate to control zic1 expression.