Ascidians are invertebrate chordates with a simple larval tadpole form containing a notochord and an overlying dorsal neural tube. As in vertebrates, the neural tube of ascidian larvae displays positional differences along the rostral-caudal and dorsal-ventral axes in terms of neuronal cell types generated, morphology and gene expression. However, how these differences are established in this simple chordate remains largely unknown. In this study, we show that a single blastomere named b6.5, which is situated in a lateral position in the 32-cell-stage embryo, is a source of signal(s) required for patterning across the medial-lateral axis (future ventral-dorsal axis) of the neural plate. We identify this signal as a Ciona homologue of Nodal, Ci-Nodal. Transcriptional activation of Ci-Nodal in b6.5 depends upon vegetally derived Ci-FGF9/16/20. Using three distinct reagents to inhibit Nodal signals, we show that Nodal signalling is required for neural plate patterning across the medial-lateral axis and that, in the absence of this signal, the caudal-lateral part of the neural plate adopts a medial-like fate. Secondary muscle fate is similarly affected. We conclude that specification of the lateral neural plate is initiated by signalling sources laterally flanking the neural plate and involves a cell-fate choice between lateral and medial neural fates, with Nodal signalling promoting lateral fate. This role for Nodal signalling during ascidian neural plate patterning contrasts with that in vertebrates, where it is implicated in promoting a medial neural fate, the floor plate.