Neural crest cells are a migratory population that forms most of the peripheral nervous system, facial skeleton, and numerous other derivatives. These cells arise from the neural ectoderm and are first recognizable as discrete cells after neural tube closure. In this review, I summarize the results of studies from our laboratory on neural crest cell lineage and origin. Our recent experiments demonstrate that interactions between the presumptive neural plate and the nonneural ectoderm are likely to be instrumental in the induction of the avian neural crest. Juxtaposition of these tissues at early stages results in the formation of neural crest cells at the interface. However, neural crest cells do not appear to be segregated from other neuroepithelial cells; cell lineage studies have demonstrated that individual precursor cells within the neural tube can give rise to both neural crest and neural tube derivatives as diverse as sensory, commissural, and motor neurons. This suggests that individual neuroectodermal cells are multipotent, such that a precursor within the neural tube has the ability to form both neural tube (central nervous system) and neural crest (peripheral nervous system and other) derivatives. Further support for flexibility in the developmental program of neuroepithelial cells comes from experiments in which the cranial neural folds are ablated; this results in regulation by the remaining ventral neural tube cells to form neural crest cells after the endogenous neural crest is removed. At later stage of development, this regulative capacity is lost. Following their emigration from the neural tube, neural crest cells become progressively restricted to defined embryonic states. Taken together, these experiments demonstrate that: (1) the neural crest is an induced population that arises by interactions within the ectoderm; (2) initially, progenitor cells are multipotent, having the potential to form multiple neural crest and neural tube derivatives; and (3) with time, the precursors become progressively restricted to form neural crest derivatives and eventually to individual phenotypes.