Polycomb group (PcG) genes are chromatin modifiers that mediate epigenetic silencing of target genes. PcG-mediated epigenetic silencing is implicated in embryonic development, stem cell plasticity, cell fate maintenance, cellular differentiation and cancer. However, analysis of the roles of PcG proteins in maintaining differentiation programs during vertebrate embryogenesis has been hampered due to the early embryonic lethality of several PcG knock-outs in the mouse. Here, we show that zebrafish Ring1b/Rnf2, the single E3 ubiquitin ligase in the Polycomb Repressive Complex 1, critically regulates the developmental program of craniofacial cell lineages. Zebrafish ring1b mutants display a severe craniofacial phenotype, which includes an almost complete absence of all cranial cartilage, bone and musculature. We show that Cranial Neural Crest (CNC)-derived cartilage precursors migrate correctly into the pharyngeal arches, but fail to differentiate into chondrocytes. This phenotype is specific for cartilage precursors, since other neural crest-derived cell lineages, including glia, neurons and chromatophores, are formed normally in ring1b mutants. Our results therefore reveal a critical and specific role for Ring1b in promoting the differentiation of cranial neural crest cells into chondrocytes. The molecular mechanisms underlying the pathogenesis of craniofacial abnormalities, which are among the most common genetic birth defects in humans, remain poorly understood. The zebrafish ring1b mutant provides a molecular model for investigating these mechanisms and may lead to the discovery of new treatments or preventions of craniofacial abnormalities.