The HMG-domain containing transcription factor Sox10 is essential for neural crest (NC) development and for oligodendrocyte differentiation. Heterozygous SOX10 mutations in humans lead to corresponding defects in several NC-derived lineages and to leukodystrophies. Disease phenotypes range from Waardenburg syndrome and Waardenburg-Hirschsprung disease to Peripheral demyelinating neuropathy, Central dysmyelination, Waardenburg syndrome and Hirschsprung disease (PCWH). The phenotypic variability can partly be explained by the action of modifier genes, but is also influenced by the mutation that leads to haploinsufficiency in some and to mutant SOX10 proteins with altered properties in other cases. Here, we used in ovo electroporation in the developing neural tube of chicken to determine which regions and properties of SOX10 are required for early NC development. We found a strict reliance on the DNA-binding activity and the presence of the C-terminal transactivation domain and a lesser influence of the dimerization function and a conserved domain in the center of the protein. Intriguingly, dominant-negative effects on early NC development were mostly observed for truncated SOX10 proteins whose production in patients is probably prevented by nonsense-mediated decay. In contrast, mutant SOX10 proteins that occur in patients were usually inactive. Any dominant negative activity which some of these mutants undoubtedly possess must, therefore, be restricted to single NC-derived cell lineages or oligodendrocytes at later times. This contributes to the phenotypic variability of human SOX10 mutations.