During spinal cord development, transcription factors and signalling proteins, such as the BMPs, are involved in neural tube (NT) patterning and in inducing neural differentiation. Although epigenetic modifications are known to regulate the expression of key neural development genes in stem cells, whether they have a role in spinal cord development remains unclear. On p. 2915, Marian Martínez-Balbás and colleagues study histone H3 lysine 27 trimethylation (H3K27me3) in vivo during chick embryo neurogenesis. They show that global levels of H3K27me3 increase along neurogenesis and regulate BMP signalling within the NT. Using microarray analysis, they find that the expression of Noggin, a BMP inhibitor, is repressed by H3K27me3. Importantly, they show that, in response to BMP activity, the histone demethylase JMJD3 interacts with the Smad1/4 complex to demethylate and thereby activate the Noggin promoter. This reveals a novel pathway by which BMP signalling can regulate its own activity within the spinal cord by modulating expression of its inhibitor Noggin.