It is known the interactions between the neural plate and epidermis generate neural crest (NC), but it is unknown why the NC develops only at the lateral border of the neural plate and not in the anterior fold. Using grafting experiments we show that there is a previously unidentified mechanism that precludes NC from the anterior region. We identify prechordal mesoderm as the tissue that inhibits NC in the anterior territory and show that the Wnt/beta-catenin antagonist Dkk1, secreted by this tissue, is sufficient to mimic this NC inhibition. We show that Dkk1 is required for preventing the formation of NC in the anterior neural folds as loss-of-function experiments using a Dkk1 blocking antibody in Xenopus as well as the analysis of Dkk1-null mouse embryos transform the anterior neural fold into NC. This can be mimicked by Wnt/beta-catenin signaling activation without affecting the anterior posterior patterning of the neural plate, or placodal specification. Finally, we show that the NC cells induced at the anterior neural fold are able to migrate and differentiate as normal NC. These results demonstrate that anterior regions of the embryo lack NC because of a mechanism, conserved from fish to mammals, that suppresses Wnt/beta-catenin signaling via Dkk1.