Syndecan-4 (Syn4) is a heparan sulphate proteoglycan that is able to bind to some growth factors, including FGF, and can control cell migration. Here we describe a new role for Syn4 in neural induction in Xenopus. Syn4 is expressed in dorsal ectoderm and becomes restricted to the neural plate. Knockdown with antisense morpholino oligonucleotides reveals that Syn4 is required for the expression of neural markers in the neural plate and in neuralised animal caps. Injection of Syn4 mRNA induces the cellautonomous expression of neural, but not mesodermal, markers. We show that two parallel pathways are involved in the neuralising activity of Syn4: FGF/ERK, which is sensitive to dominant-negative FGF receptor and to the inhibitors SU5402 and U0126, and a PKC pathway, which is dependent on the intracellular domain of Syn4. Neural induction by Syn4 through the PKC pathway requires inhibition of PKCδ and activation of PKCα. We show that PKCα inhibits Rac GTPase and that c-Jun is a target of Rac. These findings might account for previous reports implicating PKC in neural induction and allow us to propose a link between FGF and PKC signalling pathways during neural induction.