Leucine-rich repeats and immunoglobulin-like domains 3 (Lrig3) was identified by microarray analysis among genes that show differential expression during gastrulation in Xenopus laevis. Lrig3 was expressed in the neural plate and neural crest (NC) at neurula stages, and in NC derivatives and other dorsal structures during tailbud stages. A prominent consequence of the morpholino-induced inhibition of Lrig3 expression was impaired NC formation, as revealed by the suppression of marker genes, including Slug, Sox9 and Foxd3. In the NC induction assay involving Chordin plus Wnt3a-injected animal caps, Lrig3 morpholino inhibited expression of Slug, Sox9 and Foxd3, but not of Pax3 and Zic1. In line with this, Lrig3 knockdown prevented NC marker induction by Pax3 and Zic1, suggesting that Lrig3 acts downstream of these two genes in NC formation. Injection of Lrig3 and Wnt3a led to low-level induction of NC markers and enhanced induction of Fgf3, Fgf4 and Fgf8 in animal caps, suggesting a positive role for Lrig3 in Wnt signaling. Lrig3 could attenuate Fgf signaling in animal caps, did interact with Fgf receptor 1 in cultured cells and, according to context, decreased or increased the induction of NC markers by Fgf. We suggest that Lrig3 functions in NC formation in Xenopus by modulating the Wnt and Fgf signaling pathways.