Proper morphogenesis is essential for both form and function of the mammalian craniofacial skeleton, which consists of more than twenty small cartilages and bones. Skeletal elements that support the oral cavity are derived from cranial neural crest cells (NCCs) that develop in the maxillary and mandibular buds of pharyngeal arch 1 (PA1). Bone Morphogenetic Protein (BMP) signaling has been implicated in most aspects of craniofacial skeletogenesis, including PA1 development. However, the roles of the BMP antagonist Noggin in formation of the craniofacial skeleton remain unclear, in part because of its multiple domains of expression during formative stages. Here we used a tissue-specific gene ablation approach to assess roles of Noggin (Nog) in two different tissue domains potentially relevant to mandibular and maxillary development. We found that the axial midline domain of Nog expression is critical to promote PA1 development in early stages, necessary for adequate outgrowth of the mandibular bud. Subsequently, Nog expression in NCCs regulates craniofacial cartilage and bone formation. Mice lacking Nog in NCCs have an enlarged mandible that results from increased cell proliferation in and around Meckel׳s cartilage. These mutants also show complete secondary cleft palate, most likely due to inhibition of posterior palatal shelf elevation by disrupted morphology of the developing skull base. Our findings demonstrate multiple roles of Noggin in different domains for craniofacial skeletogenesis, and suggest an indirect mechanism for secondary cleft palate in Nog mutants that may be relevant to human cleft palate as well.