Vertebrate neural crest cells, derived from the neural folds, generate a variety of tissues, such as cartilage, ganglia, and cranial (intramembranous) bone. The chick homolog of the helix-loop-helix transcriptional regulator Id2 is expressed in cranial but not trunk neural folds and subsequently in some migrating cranial neural crest cells. Ectopic expression of Id2 with recombinant retroviruses converted ectodermal cells to a neural crest fate, demonstrating that proper regulation of Id2 is important for sustaining epidermal traits. In addition, overexpression of Id2 resulted in overgrowth and premature neurogenesis of the dorsal neural tube. These results suggest that Id2 may allocate ectodermal precursors into neural rather than epidermal lineages.