In this study we investigate the roles of the organizer factors chordin and noggin, which are dedicated antagonists of the bone morphogenetic proteins (BMPs), in formation of the mammalian head. The mouse chordin and noggin genes (Chrd and Nog) are expressed in the organizer (the node) and its mesendodermal derivatives, including the prechordal plate, an organizing center for rostral development. They are also expressed at lower levels in and around the anterior neural ridge, another rostral organizing center. To elucidate roles of Chrd and Nog that are masked by the severe phenotype and early lethality of the double null, we have characterized embryos of the genotype Chrd(-/-);Nog(+/-). These animals display partially penetrant neonatal lethality, with defects restricted to the head. The variable phenotypes include cyclopia, holoprosencephaly, and rostral truncations of the brain and craniofacial skeleton. In situ hybridization reveals a loss of SHH expression and signaling by the prechordal plate, and a decrease in FGF8 expression and signaling by the anterior neural ridge at the five-somite stage. Defective Chrd(-/-);Nog(+/-) embryos exhibit reduced cell proliferation in the rostral neuroepithelium at 10 somites, followed by increased cell death 1 day later. Because these phenotypes result from reduced levels of BMP antagonists, we hypothesized that they are due to increased BMP activity. Ectopic application of BMP2 to wild-type cephalic explants results in decreased FGF8 and SHH expression in rostral tissue, suggesting that the decreased expression of FGF8 and SHH observed in vivo is due to ectopic BMP activity. Cephalic explants isolated from Chrd;Nog double mutant embryos show an increased sensitivity to ectopic BMP protein, further supporting the hypothesis that these mutants are deficient in BMP antagonism. These results indicate that the BMP antagonists chordin and noggin promote the inductive and trophic activities of rostral organizing centers in early development of the mammalian head.