Neural tube closure is a dynamic, complex developmental process. Its failure causes neural tube defects. The gene Grhl3 is indispensable for this process, however, the mechanisms by which it induces neural tube closure remain unclear. Through single-cell RNA-sequencing and mouse models, we identified that a previously unrecognised Grhl3-expressing novel progenitor population is the actual cell cohort responsible for inducing neural tube closure. We also found that neural tube closure in animals lacking Grhl3 becomes more susceptible to perturbation of retinoic acid signalling, providing new insights into the complexities of the interplay between retinoic acid signalling and Grhl3-induced neurulation.