Cell fate determination is a necessary and tightly regulated process for producing different cell types and structures during development. Cranial neural crest cells (CNCCs) are unique to vertebrate embryos and emerge from the neural plate borders into multiple cell lineages that differentiate into bone, cartilage, neurons and glial cells. We have previously reported that Irf6 genetically interacts with Twist1 during CNCC-derived tissue formation. Here, we have investigated the mechanistic role of Twist1 and Irf6 at early stages of craniofacial development. Our data indicate that TWIST1 is expressed in endocytic vesicles at the apical surface and interacts with β/δ-catenins during neural tube closure, and Irf6 is involved in defining neural fold borders by restricting AP2α expression. Twist1 suppresses Irf6 and other epithelial genes in CNCCs during the epithelial-to-mesenchymal transition (EMT) process and cell migration. Conversely, a loss of Twist1 leads to a sustained expression of epithelial and cell adhesion markers in migratory CNCCs. Disruption of TWIST1 phosphorylation in vivo leads to epidermal blebbing, edema, neural tube defects and CNCC-derived structural abnormalities. Altogether, this study describes a previously uncharacterized function of mammalian Twist1 and Irf6 in the neural tube and CNCCs, and provides new target genes for Twist1 that are involved in cytoskeletal remodeling.