The oral-aboral (OA) axis in the sea urchin is specified by the TGFbeta family members Nodal and BMP2/4. Nodal promotes oral specification, whereas BMP2/4, despite being expressed in the oral territory, is required for aboral specification. This study explores the role of Chordin (Chd) during sea urchin embryogenesis. Chd is a secreted BMP inhibitor that plays an important role in axial and neural specification and patterning in Drosophila and vertebrate embryos. In Lytechinus variegatus embryos, Chd and BMP2/4 are functionally antagonistic. Both are expressed in overlapping domains in the oral territory prior to and during gastrulation. Perturbation shows that, surprisingly, Chd is not involved in OA axis specification. Instead, Chd is required both for normal patterning of the ciliary band at the OA boundary and for development of synaptotagmin B-positive (synB) neurons in a manner that is reciprocal with BMP2/4. Chd expression and synB-positive neural development are both downstream from p38 MAPK and Nodal, but not Goosecoid. These data are summarized in a model for synB neural development.