The organization of the embryonic neural plate requires coordination of multiple signal transduction pathways, including fibroblast growth factors (FGFs), bone morphogenetic proteins (BMPs), and WNTs. Many studies have suggested that a critical component of this process is the patterning of posterior neural tissues by an FGF-caudal signaling cascade. Here, we have identified a novel player, Dazap2, and show that it is required in vivo for posterior neural fate. Loss of Dazap2 in embryos resulted in diminished expression of hoxb9 with a concurrent increase in the anterior marker otx2. Furthermore, we found that Dazap2 is required for FGF dependent posterior patterning; surprisingly, this is independent of Cdx activity. Furthermore, in contrast to FGF activity, Dazap2 induction of hoxb9 is not blocked by loss of canonical Wnt signaling. Functionally, we found that increasing Dazap2 levels alters neural patterning and induces posterior neural markers. This activity overcomes the anteriorizing effects of noggin, and is downstream of FGF receptor activation. Our results strongly suggest that Dazap2 is a novel and essential branch of FGF-induced neural patterning.