Folate supplementation reduces the occurrence of neural tube defects, one of the most common and serious birth defects, consisting in the failure of the neural tube to form and close early in pregnancy. The mechanisms underlying neural tube defects and folate action during neural tube formation remain unclear. Here we show that folate receptor 1 (FOLR1) is necessary for the formation of neural tube-like structures in human-cell derived neural organoids. Knockdown of FOLR1 in human neural organoids as well as in the Xenopus laevis in vivo model leads to neural tube defects that are rescued by pteroate, a folate precursor that binds to FOLR1 but is unable to participate in metabolic pathways. We demonstrate that FOLR1 interacts with and opposes the function of CD2-associated protein (CD2AP), a molecule that we find is essential for apical endocytosis and the spatiotemporal turnover of the cell adherens junction component C-cadherin in neural plate cells. The counteracting action of FOLR1 on these processes is mediated by regulating CD2AP protein level via a degradation-dependent mechanism. In addition, folate and pteroate increase Ca 2+ transient frequency in the neural plate in a FOLR1-dependent manner, suggesting that folate/FOLR1 signal intracellularly to regulate neural plate folding. This study identifies a mechanism of action of folate distinct from its vitamin function during neural tube formation.