Depletion of Wnt signaling is a major requirement for the induction of the anterior prosencephalon. However, the molecular events driving the differential regionalization of this area into eye-field and telencephalon fates are still unknown. Here we show that the BMP pathway is active in the anterior neural ectoderm during late blastula to early gastrula stage in zebrafish. Bmp2b mutants and mosaic loss-of-function experiments reveal that BMP acts as a repressor of eye-field fate through inhibition of its key transcription factor Rx3, thereby protecting the future telencephalon from acquiring eye identity. This BMP-driven mechanism initiates the establishment of the telencephalon prior to the involvement of Wnt antagonists from the anterior neural border. Furthermore, we demonstrate that Rx3 and BMP are respectively required to maintain and restrict the chemokine receptor cxcr4a, which in turn contributes to the morphogenetic separation of eye-field and telencephalic cells during early neurulation.