Bone morphogenetic protein (BMP) gradients provide positional information to direct cell fate specification, such as patterning of the vertebrate ectoderm into neural, neural crest, and epidermal tissues, with precise borders segregating these domains. However, little is known about how BMP activity is regulated spatially and temporally during vertebrate development to contribute to embryonic patterning, and more specifically to neural crest formation. Through a large-scale in vivo functional screen in Xenopus for neural crest fate, we identified an essential regulator of BMP activity, SNW1. SNW1 is a nuclear protein known to regulate gene expression. Using antisense morpholinos to deplete SNW1 protein in both Xenopus and zebrafish embryos, we demonstrate that dorsally expressed SNW1 is required for neural crest specification, and this is independent of mesoderm formation and gastrulation morphogenetic movements. By exploiting a combination of immunostaining for phosphorylated Smad1 in Xenopus embryos and a BMP-dependent reporter transgenic zebrafish line, we show that SNW1 regulates a specific domain of BMP activity in the dorsal ectoderm at the neural plate border at post-gastrula stages. We use double in situ hybridizations and immunofluorescence to show how this domain of BMP activity is spatially positioned relative to the neural crest domain and that of SNW1 expression. Further in vivo and in vitro assays using cell culture and tissue explants allow us to conclude that SNW1 acts upstream of the BMP receptors. Finally, we show that the requirement of SNW1 for neural crest specification is through its ability to regulate BMP activity, as we demonstrate that targeted overexpression of BMP to the neural plate border is sufficient to restore neural crest formation in Xenopus SNW1 morphants. We conclude that through its ability to regulate a specific domain of BMP activity in the vertebrate embryo, SNW1 is a critical regulator of neural plate border formation and thus neural crest specification.