The endodermal pouches are a series of reiterated structures that segment the pharyngeal arches and help pattern the vertebrate face. Multiple pathways regulate the complex process of endodermal development including the Bone Morphogenetic Protein (Bmp) pathway. However, the role of Bmp signaling in pouch morphogenesis is poorly understood. Using genetic and chemical inhibitor approaches, we show that pouch morphogenesis requires Bmp signaling from 10-18 hours post-fertilization, immediately following gastrulation. Blocking Bmp signaling during this window results in morphological defects to the pouches and craniofacial skeleton. Using genetic chimeras we show that Bmp signals directly to the endoderm for proper morphogenesis. Time-lapse imaging and analysis of reporter transgenics show that Bmp signaling is necessary for pouch outpocketing via the Fibroblast Growth Factor (Fgf) pathway. Double loss-of-function analyses demonstrate that Bmp and Fgf signaling interact synergistically in craniofacial development. Collectively, our analyses shed light on the tissue and signaling interactions regulating development of the vertebrate face.