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Folate supplementation reduces the occurrence of neural tube defects (NTDs), birth defects consisting in the failure of the neural tube to form and close. The mechanisms underlying NTDs and their prevention by folate remain unclear. Here we show that folate receptor 1 (FOLR1) is necessary for the formation of neural tube-like structures in human-cell derived neural organoids. FOLR1 knockdown in neural organoids and inXenopus laevisembryos leads to NTDs that are rescued by pteroate, a folate precursor that is unable to participate in metabolism. We demonstrate that FOLR1 interacts with and opposes the function of CD2-associated protein, molecule essential for apical endocytosis and turnover of C-cadherin in neural plate cells. In addition, folates increase Ca²⁺transient frequency, suggesting that folate and FOLR1 signal intracellularly to regulate neural plate folding. This study identifies a mechanism of action of folate distinct from its vitamin function during neural tube formation.