A family of inner nuclear membrane proteins is implicated in gene regulation by interacting with chromatin, nuclear lamina and intranuclear proteins; however, the physiological functions of these proteins are largely unknown. Using a Xenopus expression screening approach with an anterior neuroectoderm cDNA library, we have identified an inner nuclear membrane protein, XMAN1, as a novel neuralizing factor that is encoded by theXenopus ortholog of human MAN1. XMAN1 mRNA is expressed maternally, and appears to be restricted to the entire ectoderm at the early gastrula stage, then to the anterior neuroectoderm at the neurula stage. XMAN1 induces anterior neural markers without mesoderm induction in ectodermal explants, and a partial secondary axis when expressed ventrally by dorsalizing the ventral mesoderm. Importantly, XMAN1 antagonizes bone morphogenetic protein (BMP) signaling downstream of its receptor Alk3, as judged by animal cap assays, in which XMAN1 blocks expression of downstream targets of BMP signaling (Xhox3 and Msx1), and by luciferase reporter assays, in which XMAN1 suppresses BMP-dependent activation of theXvent2 promoter. Deletion mutant analyses reveal that the neuralizing and BMP-antagonizing activities of XMAN1 reside in the C-terminal region, and that the C-terminal region binds to Smad1, Smad5 and Smad8, which are intracellular mediators of the BMP pathway. Interference with endogenous XMAN1 functions with antisense morpholino oligos leads to the reduction of anterior neuroectoderm. These results provide the first evidence that the nuclear envelope protein XMAN1 acts as a Smad-interacting protein to antagonize BMP signaling during Xenopus embryogenesis.