We describe a mechanistic model whereby Foxd3, a forkhead transcription factor, prevents neural crest-derived precursors from acquiring a melanophore fate. Foxd3 regulates this fate choice by repressing the mitfa promoter in a subset of neural crest cells. mitfa is only expressed in a Foxd3-negative subset of neural crest cells, and foxd3 mutants show an increase in the spatial domain of mitfa expression, thereby suggesting that Foxd3 limits the mitfa domain. Furthermore, foxd3:gfp transgenic zebrafish reveal foxd3 expression in xanthophore precursors and iridophores, but not in terminally differentiated melanophores. Luciferase experiments and embryo mRNA injections indicate Foxd3 acts directly on the mitfa promoter to negatively regulate mitfa expression. Taken together, our data suggests the presence of Foxd3 in a subset of precursors leads to mitfa repression and suppression of melanophore fate. MITF, the human mitfa ortholog, has recently been described as an oncogene and implicated in various forms of melanoma. Understanding the mechanisms that regulate mitfa and melanophore development could prove informative in the treatment and prevention of these human diseases.