We have investigated the role of Bone Morphogenetic Protein 4 (BMP-4) and a BMP antagonist, chordin, in primitive streak formation and neural induction in amniote embryos. We show that both BMP-4 and chordin are expressed before primitive streak formation, and that BMP-4 expression is downregulated as the streak starts to form. When BMP-4 is misexpressed in the posterior area pellucida, primitive streak formation is inhibited. Misexpression of BMP-4 also arrests further development of Hensen's node and axial structures. In contrast, misexpression of chordin in the anterior area pellucida generates an ectopic primitive streak that expresses mesoderm and organizer markers. We also provide evidence that chordin is not sufficient to induce neural tissue in the chick. Misexpression of chordin in regions outside the future neural plate does not induce the early neural markers L5, Sox-3 or Sox-2. Furthermore, neither BMP-4 nor BMP-7 interfere with neural induction when misexpressed in the presumptive neural plate before or after primitive streak formation. However, chordin can stabilise the expression of early neural markers in cells that have already received neural inducing signals. These results suggest that the regulation of BMP signalling by chordin plays a role in primitive streak formation and that chordin is not sufficient to induce neural tissue.