Facial shape is the basis for facial recognition and categorization. Facial features reflect the underlying geometry of the skeletal structures. Here we reveal that cartilaginous nasal capsule (corresponding to upper jaw and face) is shaped by signals generated by neural structures: brain and olfactory epithelium. Brain-derived Sonic Hedgehog (SHH) enables the induction of nasal septum and posterior nasal capsule, whereas the formation of a capsule roof is controlled by signals from the olfactory epithelium. Unexpectedly, the cartilage of the nasal capsule turned out to be important for shaping membranous facial bones during development. This suggests that conserved neurosensory structures could benefit from protection and have evolved signals inducing cranial cartilages encasing them. Experiments with mutant mice revealed that the genomic regulatory regions controlling production of SHH in the nervous system contribute to facial cartilage morphogenesis, which might be a mechanism responsible for the adaptive evolution of animal faces and snouts.