ABSTRACT The most anterior structure of the ascidian larva is made of three palps with sensory and adhesive functions essential for metamorphosis. They derive from the anterior neural border and their formation is regulated by FGF and Wnt. Given that they also share gene expression profiles with vertebrate anterior neural tissue and cranial placodes, their study should shed light on the emergence of the unique vertebrate telencephalon. We show that BMP signaling regulates two phases of palp formation in Ciona intestinalis. During gastrulation, the anterior neural border is specified in a domain of inactive BMP signaling, and activating BMP prevented its formation. During neurulation, BMP defines ventral palp identity and indirectly specifies the inter-papilla territory separating the ventral and dorsal palps. Finally, we show that BMP has similar functions in the ascidian Phallusia mammillata, for which we identified novel palp markers. Collectively, we provide a better molecular description of palp formation in ascidians that will be instrumental for comparative studies.