Retinoic acid signaling is a major component of the neural posteriorizing process in vertebrate development. Here, we identify a new role for the retinoic acid receptor (RAR) in the anterior of the embryo, where RAR regulates Fgf8 expression and formation of the pre-placodal ectoderm (PPE). RARα2 signaling induces key pre-placodal genes and establishes the posterolateral borders of the PPE. RAR signaling upregulates two important genes, Tbx1 and Ripply3, during early PPE development. In the absence of RIPPLY3, TBX1 is required for the expression of Fgf8 and hence, PPE formation. In the presence of RIPPLY3, TBX1 acts as a transcriptional repressor, and functions to restrict the positional expression of Fgf8, a key regulator of PPE gene expression. These results establish a novel role for RAR as a regulator of spatial patterning of the PPE through Tbx1 and RIPPLY3. Moreover, we demonstrate that Ripply3, acting downstream of RAR signaling, is a key player in establishing boundaries in the PPE.