Extracellular regulation of growth factor signaling is a key event for embryonic patterning. Heparan sulfate proteoglycans (HSPG) are among the molecules that regulate this signaling during embryonic development. Here we study the function of syndecan1 (Syn1), a cell-surface HSPG expressed in the non-neural ectoderm during early development of Xenopus embryos. Overexpression of Xenopus Syn1 (xSyn1) mRNA is sufficient to reduce BMP signaling, induce chordin expression and rescue dorso-ventral patterning in ventralized embryos. Experiments using chordin morpholinos established that xSyn1 mRNA can inhibit BMP signaling in the absence of chordin. Knockdown of xSyn1 resulted in a reduction of BMP signaling and expansion of the neural plate with the concomitant reduction of the non-neural ectoderm. Overexpression of xSyn1 mRNA in xSyn1 morphant embryos resulted in a biphasic effect, with BMP being inhibited at high concentrations and activated at low concentrations of xSyn1. Interestingly, the function of xSyn1 on dorso-ventral patterning and BMP signaling is specific for this HSPG. In summary, we report that xSyn1 regulates dorso-ventral patterning of the ectoderm through modulation of BMP signaling.