Bone morphogenetic protein 15 (BMP15) belongs to an unusual subgroup of the transforming growth factor beta (TGFbeta) superfamily of signaling ligands as it lacks a key cysteine residue in the mature region required for proper intermolecular dimerization. Naturally occurring BMP15 mutation leads to early ovarian failure in humans, and BMP15 has been shown to activate the Smad1/5/8 pathway in that context. Despite its important role in germ cell specification, the embryological function of BMP15 remains unknown. Surprisingly, we find that during early Xenopus embryogenesis BMP15 acts solely as an inhibitor of the Smad1/5/8 pathway and the Wnt pathway. BMP15 gain-of-function leads to embryos with secondary ectopic heads and to direct neural induction in intact explants. BMP15 inhibits BMP4-mediated epidermal induction in dissociated explants. BMP15 strongly inhibits BRE response induced by BMP4 and blocks phosphorylation and activation of Smad1/5/8 MH2-domain. Mechanistically, BMP15 protein specifically interacts with BMP4 protein, suggesting inhibition upstream of receptor binding. Loss-of-function experiments using morpholinos or a naturally occurring human BMP15 dominant-negative mutant (BMP15-Y235C) leads to embryos lacking head. BMP15-Y235C also eliminates the inhibitory activity of BMP15 on BRE (BMP-responsive element). Finally, we show that BMP15 inhibits the canonical branch of the Wnt pathway, upstream of beta-catenin. We, thus, demonstrate that BMP15 is necessary and sufficient for the specification of dorso-anterior structures and highlight novel mechanisms of BMP15 function that strongly suggest a reinterpretation of its function in ovaries specially for ovarian failure.