Cholesterol-rich membrane microdomains (CRMMs) are specialized structures that have recently gained much attention in cell biology because of their involvement in cell signaling and trafficking. However, few investigations, particularly those addressing embryonic development, have succeeded in manipulating and observing CRMMs in living cells. In this study, we performed a detailed characterization of the CRMMs lipid composition during early frog development. Our data showed that disruption of CRMMs through methyl-β-cyclodextrin (MβCD) cholesterol depletion at the blastula stage did not affect Spemann's organizer gene expression and inductive properties, but impaired correct head development in frog and chick embryos by affecting the prechordal plate gene expression and cellular morphology. The MβCD anterior defect phenotype was recapitulated in head anlagen (HA) explant cultures. Culture of animal cap expressing Dkk1 combined with MβCD-HA generated a head containing eyes and cement gland. Together, these data show that during Xenopus blastula and gastrula stages, CRMMs have a very dynamic lipid composition and provide evidence that the secreted Wnt antagonist Dkk1 can partially rescue anterior structures in cholesterol-depleted head anlagen.