Closed spinal dysraphisms are poorly understood neurodevelopmental malformations commonly classed as neural tube defects. Several, including terminal myelocystocele, selectively affect the distal lumbosacral spine. We previously identified a neural tube closure-initiating point, Closure 5, involved in forming the distal spine of mice. Here we document equivalent morphology of the caudal-most end of the closing posterior neuropore (PNP) in mice and humans, suggesting Closure 5 is conserved in humans. It forms in a region of active fibroblast growth factor (FGF) signalling and pharmacological blockade of FGF receptors (Fgfr) impairs Closure 5 formation in cultured mouse embryos. Conditional genetic deletion of Fgfr1 in caudal embryonic tissues with Cdx2Cre similarly impairs Closure 5 formation and leads to morphologically abnormal PNPs, which nonetheless achieve delayed closure although delayed. After PNP closure, a localised region of the distal neural tube of Fgfr1-disrupted embryos re-opens into a trumpet-like flared central canal between the presumptive hindlimbs, progressing to form a distal fluid-filled sac overlying ventrally flattened spinal cord. This phenotype resembles terminal myelocystocele. Histological analysis of spinal progenitor domains reveals regional and progressive loss of ventral spinal cord progenitor domains preceding cystic dilation of the central canal. Initially, the Shh and FoxA2-positive ventral domains are lost, resulting in Olig2-labelling of the ventral-most neural tube. The Olig2-domain is also subsequently lost, eventually producing a neural tube entirely positive for the dorsal marker Pax3. Thus, a terminal myelocystocele-like phenotype can arise after completion of neural tube closure due to localised spinal mis-patterning caused by disruption of Fgfr1 signalling.