During primary neurulation, the separation of a single-layered ectodermal sheet into the surface ectoderm (SE) and neural tube specifies SE and neural ectoderm (NE) cell fates. The mechanisms underlying fate specification in conjunction with neural tube closure are poorly understood. Here, by comparing expression profiles between SE and NE lineages, we observed that uncommitted progenitor cells, expressing stem cell markers, are present in the neural plate border/neural fold prior to neural tube closure. Our results also demonstrated that canonical Wnt and its antagonists, DKK1/KREMEN1, progressively specify these progenitors into SE or NE fates in accord with the progress of neural tube closure. Additionally, SE specification of the neural plate border via canonical Wnt signaling is directed by the grainyhead-like 3 (Grhl3) transcription factor. Thus, we propose that the fate specification of uncommitted progenitors in the neural plate border by canonical Wnt signaling and its downstream effector Grhl3 is crucial for neural tube closure. This study implicates that failure in critical genetic factors controlling fate specification of progenitor cells in the neural plate border/neural fold coordinated with neural tube closure may be potential causes of human neural tube defects.