The neural crest is a population of migratory cells, arising from the ectoderm, that invades many sites within the embryo and differentiate into a variety of diverse cell types. Pigment cells, most cells of the peripheral nervous system, adrenal medullary cells, and some cranial cartilage are derived from the neural crest. Despite a wealth of knowledge concerning their pathways of migration and vast array of derivatives, little is known about the formation of neural crest cells or their acquisition of positional identity. This review focuses on the origin of neural crest cells from the ectoderm and the generation of differences in neural crest cell fates along the rostrocaudal axis. In addition, we consider the role of temporal restriction in the developmental potential of premigratory neural crest cells. While evidence for the existence of multipotent stem cells is strong, some experiments also suggest that there may be heterogeneity among neural crest cell precursors, perhaps due to differences in origin, that might explain commitment events occurring early in neural crest development.