The Dmrt (doublesex and mab-3 related transcription factor) genes encode a large family of evolutionarily conserved transcription factors whose function in sex specific differentiation has been well studied in all animal lineages. In vertebrates, their function is not restricted to the developing gonads. For example, Xenopus Dmrt4 is essential for neurogenesis in the olfactory system. Here we have isolated and characterized Xenopus Dmrt5 and found that it is coexpressed with Dmrt4 in the developing olfactory placodes. As Dmrt4, Dmrt5 is positively regulated in the ectoderm by neural inducers and negatively by proneural factors. Both Dmrt5 and Dmrt4 genes are also activated by the combined action of the transcription factor Otx2, broadly transcribed in the head ectoderm and of Notch signaling, activated in the anterior neural ridge. As for Dmrt4, knockdown of Dmrt5 impairs neurogenesis in the embryonic olfactory system and in neuralized animal caps. Conversely, its overexpression promotes neuronal differentiation in animal caps, a property that requires the conserved C-terminal DMA and DMB domains. We also found that the sea anenome Dmrt4/5 related gene NvDmrtb also induces neurogenesis in Xenopus animal caps and that conversely, its knockdown in Nematostella reduces elav-1 positive neurons. Together, our data identify Dmrt5 as a novel important regulator of neurogenesis whose function overlaps with that of Dmrt4 during Xenopus olfactory system development. They also suggest that Dmrt may have had a role in neurogenesis in the last common ancestor of cnidarians and bilaterians.