In humans, neural tube closure defects occur in 1:1000 pregnancies. The design of new strategies for the prevention of such common defects would benefit from an improved understanding of the molecular events underlying neurulation. Neural fold elevation is a key morphological process that acts during neurulation to drive neural tube closure. However, to date, the molecular pathways underpinning neural fold elevation have not been elucidated. Here, we use morpholino knock-down technology to demonstrate that Repulsive Guidance Molecule (RGMa)-Neogenin interactions are essential for effective neural fold elevation during Xenopus neurulation and that loss of these molecules results in disrupted neural tube closure. We demonstrate that Neogenin and RGMa are required for establishing the morphology of deep layer cells in the neural plate throughout neurulation. We also show that loss of Neogenin severely disrupts the microtubule network within the deep layer cells suggesting that Neogenin-dependent microtubule organization within the deep cells is essential for radial intercalation with the overlying superficial cell layer, thereby driving neural fold elevation. In addition, we show that sustained Neogenin activity is also necessary for the establishment of the apicobasally polarized pseudostratified neuroepithelium of the neural tube. Therefore, our study identifies a novel signaling pathway essential for radial intercalation and epithelialization during neural fold elevation and neural tube morphogenesis.