The neural crest is a transient population of multipotent precursor cells named for its site of origin at the crest of the closing neural folds in vertebrate embryos. Following neural tube closure, these cells become migratory and populate diverse regions throughout the embryo where they give rise to most of the neurons and support cells of the peripheral nervous system (PNS), pigment cells, smooth muscle, craniofacial cartilage, and bone. Because of its remarkable ability to generate such diverse derivatives, the neural crest has fascinated developmental biologists for over one hundred years. A great deal has been learned about the migratory pathways neural crest cells follow and the signals that may trigger their differentiation, but until recently comparatively little was known about earlier steps in neural crest development. In the past few years progress has been made in understanding these earlier events, including how the precursors of these multipotent cells are specified in the early embryo and the mechanisms by which they become migratory. In this review, we first examine the mechanisms underlying neural crest induction, paying particular attention to a number of growth factor and transcription factor families that have been implicated in this process. We also discuss when and how the fate of neural crest precursors may diverge from those of nearby neural and epidermal populations. Finally, we review recent advances in our understanding of how neural crest cells become migratory and address the process of neural crest diversification.