Background: The neural plate border ectoderm gives rise to key developmental structures during embryogenesis, including the neural crest and the preplacodal ectoderm. Many sensory organs and ganglia of vertebrates develop from cranial placodes, which themselves arise from preplacodal ectoderm, defined by expression of transcription factor Six1 and its coactivator Eya1. Here we elucidate the gene regulatory network underlying the specification of the preplacodal ectoderm in Xenopus, and the functional interactions among transcription factors that give rise to this structure.Results: To elucidate the gene regulatory network upstream of preplacodal ectoderm formation, we use gain-and loss-of-function studies to explore the role of early ectodermal transcription factors for establishing the preplacodal ectoderm and adjacent ectodermal territories, and the role of Six1 and Eya1 in feedback regulation of these transcription factors. Our findings suggest that transcription factors with expression restricted to ventral (non-neural) ectoderm (AP2, Msx1, FoxI1, Vent2, Dlx3, GATA2) and those restricted to dorsal (neural) ectoderm (Pax3, Hairy2b, Zic1) are required for specification of both preplacodal ectoderm and neural crest in a context-dependent fashion and are cross-regulated by Eya1 and Six1.Conclusion: These findings allow us to elucidate a detailed gene regulatory network at the neural plate border upstream of preplacodal ectoderm formation based on functional interactions between ectodermal transcription factors. We propose a new model to explain the formation of immediately juxtaposed preplacodal ectoderm and neural crest territories at the neural plate border, uniting previous models.