Foxi1 is a master regulator of ionocytes (ISCs / INCs) across species and organs. Two subtypes of ISCs exist, and both α- and α-ISCs regulate pH- and ion-homeostasis in epithelia. Gain and loss of FOXI1 function are associated with human diseases, including Pendred syndrome, male infertility, renal acidosis and cancers. Foxi1 functions were predominantly studied in the context of ISC specification, however, reports indicate additional functions in early and ectodermal development. Here, we re-investigated the functions of Foxi1 in Xenopus laevis embryonic mucociliary epidermis development and found a novel function for Foxi1 in the generation of Notch-ligand expressing mucociliary multipotent progenitors (MPPs). We demonstrate that Foxi1 has multiple concentration-dependent functions: At low levels, Foxi1 confers ectodermal competence through transcriptional and epigenetic mechanisms, while at high levels, Foxi1 induces a multi-step process of ISC specification and differentiation. We further describe how foxi1 expression is affected through auto- and Notch-regulation, how Ubp1 and Dmrt2 regulate ISC subtype differentiation, and how this developmental program affects Notch signaling as well as mucociliary patterning. Together, we reveal novel functions for Foxi1 in Xenopus mucociliary epidermis formation, relevant to our understanding of vertebrate development and human disease.