The highly-conserved Grainyhead-like (Grhl) transcription factors are critical regulators of embryogenesis that regulate cellular survival, proliferation, migration and epithelial integrity, especially during the formation of the craniofacial skeleton. Family member Grhl2 is expressed throughout epithelial tissues during development, and loss of Grhl2 function leads to significant defects in neurulation, abdominal wall closure, formation of the face and fusion of the maxilla/palate. Whereas numerous downstream target genes of Grhl2 have been identified, very little is known about how this crucial developmental transcription factor itself is regulated. Here, using in silico and in utero expression analyses and functional deletion in mice, we have identified a novel 2.4 kb enhancer element (mm1286) that drives reporter gene expression in a pattern that strongly recapitulates endogenous Grhl2 in the craniofacial primordia, modulates Grhl2 expression in these tissues, and augments Grhl2-mediated closure of the secondary palate. Deletion of this genomic element, in the context of inactivation of one allele of Grhl2 (through generation of double heterozygous Grhl2+/-;mm1286+/- mice), results in a significant predisposition to palatal clefting at birth. Moreover, we found that a highly conserved 325 bp region of mm1286 is both necessary and sufficient for mediating the craniofacial-specific enhancer activity of this region, and that an extremely well-conserved 12-bp sequence within this element (CTGTCAAACAGGT) substantially determines full enhancer function. Together, these data provide valuable new insights into the upstream genomic regulatory landscape responsible for transcriptional control of Grhl2 during palatal closure.