Genetic and embryological experiments demonstrated that the visceral endoderm (VE) is essential for positioning the primitive streak at one pole of the embryo and head morphogenesis through antagonism of the Wnt and Nodal signaling pathways. The transcription factor Otx2 is required for VE anteriorization and specification of rostral neuroectoderm at least in part by controlling the expression of Dkk1 and Lefty1. Here, we investigated the relevance of the Otx2 transcriptional control in these processes. Otx2 protein is encoded by different mRNAs variants, which, on the basis of their transcription start site, may be distinguished in distal and proximal. Distal isoforms are prevalently expressed in the epiblast and neuroectoderm, while proximal isoforms prevalently in the VE. Selective inactivation of Otx2 variants reveals that distal isoforms are not required for gastrulation, but essential for maintenance of forebrain and midbrain identities; conversely, proximal isoforms control VE anteriorization and, indirectly, primitive streak positioning through the activation of Dkk1 and Lefty1. Moreover, in these mutants the expression of proximal isoforms is not affected by the lack of distal mRNAs and vice versa. Taken together these findings indicate that proximal and distal isoforms, whose expression is independently regulated in the VE and epiblast-derived neuroectoderm, functionally cooperate to provide these tissues with the sufficient level of Otx2 necessary to promote a normal development. Furthermore, we discovered that in the VE the expression of Otx2 isoforms is tightly controlled at single cell level, and we hypothesize that this molecular diversity may potentially confer specific functional properties to different subsets of VE cells.