Imitation Switch (ISWI) is a member of the SWI2/SNF2 superfamily of ATP-dependent chromatin remodelers, which regulate transcription and maintain chromatin structure by mobilizing nucleosomes using the energy of ATP. Four distinct ISWI complexes have been identified in Xenopus oocytes. The developmental role of Xenopus ISWI, however, has not previously been investigated in vivo. Here we report the tissue specificity, developmental expression, and requirement of ISWI for development of Xenopus embryos. Whole mount in situ hybridization shows ISWI localized in the lateral sides of the neural plate, brain, eye, and in later stages, the spinal cord. Injection of antisense ISWI RNA, morpholino oligonucleotides or dominant-negative ISWI mutant mRNA into fertilized eggs inhibits gastrulation and neural fold closure. Genes involved in neural patterning and development, such as BMP4 and Sonic hedgehog (Shh), are misregulated in the absence of functional ISWI, and ISWI binds to the BMP4 gene in vivo. Developmental and transcriptional defects caused by dominant-negative ISWI are rescued by co-injection of wild-type ISWI mRNA. Inhibition of ISWI function results in aberrant eye development and the formation of cataracts. These data suggest a critical role for ISWI chromatin remodeling complexes in neural development, including eye differentiation, in the Xenopus laevis embryo.