Pathogenic genetic variants in the NuRD component CHD3 cause Snijders Blok–Campeau Syndrome, a neurodevelopmental disorder manifesting with intellectual disability and craniofacial anomalies. To investigate the role of CHD3 in craniofacial development, we differentiated control and CHD3-depleted human-induced pluripotent stem cells into cranial neural crest cells (CNCCs). In control lines, CHD3 is upregulated in early stages of CNCC specification, where it enhances the BMP signalling response by opening chromatin at BMP-responsive cis-regulatory elements and by increasing expression of BMP-responsive transcription factors, including DLX paralogs. CHD3 loss leads to repression of BMP target genes and loss of chromatin accessibility at cis-regulatory elements usually bound by BMP-responsive factors, causing an imbalance between BMP and Wnt signalling. Consequently, the CNCC specification fails, replaced by aberrant early-mesoderm identity, which can be partially rescued by titrating Wnt levels. Our findings highlight a novel role for CHD3 as a pivotal regulator of BMP signalling, essential for proper neural crest specification and craniofacial development. Moreover, these results suggest a molecular mechanism for the craniofacial anomalies of Snijders Blok–Campeau Syndrome.