Neptune, a Krüppel-like transcription factor, is expressed in various regions of the developing Xenopus embryo and it has multiple functions in the process of development in various organs. In situ hybridization analysis showed that Neptune is expressed in the boundary region between neural and non-neural tissues at the neurula stage, but little is known about the function of Neptune in this region. Here, we examined the expression and function of Neptune in the neural plate border (NPB) in the Xenopus embryo. Depletion of Neptune protein in developing embryos by using antisense MO caused loss of the hatching gland and otic vesicle as well as malformation of neural crest-derived cranial cartilages and melanocytes. Neptune MO also suppressed the expression of hatching gland and neural crest markers such as he, snail2, sox9 and msx1 at the neurula stage. Subsequent experiments showed that Neptune is necessary and sufficient for the differentiation of hatching gland cells and that it is located downstream of pax3 in the signal regulating the differentiation of these cells. Thus, Neptune is a new member of hatching gland specifier and plays a physiological role in determination and specification of multiple lineages derived from the NPB region.