Cleft lip and palate are common birth defects resulting from failure of the facial processes to fuse during development. The mammalian grainyhead-like (Grhl1-3) genes play key roles in a number of tissue fusion processes including neurulation, epidermal wound healing and eyelid fusion. One family member, Grhl2, is expressed in the epithelium lining the first pharyngeal arch in mice at embryonic day (E) 10.5, prompting analysis of the role of this factor in palatogenesis. Grhl2-null mice die at E11.5 with neural tube defects and a split face phenotype, precluding analysis of palatal fusion at later stage of development. However, palate explants from Grhl2 knock-out mice fail to fuse during ex vivo culture, and manifest dysregulation of transcription factors that drive epithelial-mesenchymal transition (EMT). The aberrant expression of these genes is associated with a shift in RNA splicing patterns that favours generation of mesenchymal isoforms of numerous regulators. Driving the EMT perturbation is loss of expression of the EMT-suppressing transcription factors Ovol1 and Ovol2, which are direct GRHL2 targets. The expression of the miR-200 family of microRNAs, also GRHL2 targets, is also reduced, resulting in a 56-fold upregulation of Zeb1 expression, a major driver of mesenchymal cellular identity. The critical role of ZEB1 in mediating failed closure in Grhl2-null palates is evident, with rescue of both palatal and facial fusion in Grhl2-/-Zeb1-/- embryos. Paradoxically, Zeb1 inactivation in isolation also induces failed palatal closure, highlighting the delicate balance between GRHL2/ZEB1 and epithelial/mesenchymal cellular identity that is essential for normal closure of the palate and face.