SUMMARYUnderstanding when and how multipotent progenitors segregate into diverse fates is a key question during embryonic development. The neural crest (NC) is an exemplary model system with which to investigate the dynamics of progenitor cell specification, as it generates a multitude of derivatives. Based on 'in ovo' lineage analysis, we previously suggested an early fate restriction of premigratory trunk NC to generate neural versus melanogenic fates, yet the timing of fate segregation and the underlying mechanisms remained unknown. Analysis of progenitors expressing a Foxd3 reporter reveals that prospective melanoblasts downregulate Foxd3 and have already segregated from neural lineages before emigration. When this downregulation is prevented, late-emigrating avian precursors fail to upregulate the melanogenic markers Mitf and MC/1 and the guidance receptor Ednrb2, generating instead glial cells that express P0 and Fabp. In this context, Foxd3 lies downstream of Snail2 and Sox9, constituting a minimal network upstream of Mitf and Ednrb2 to link melanogenic specification with migration. Consistent with the gain-of-function data in avians, loss of Foxd3 function in mouse NC results in ectopic melanogenesis in the dorsal tube and sensory ganglia. Altogether, Foxd3 is part of a dynamically expressed gene network that is necessary and sufficient to regulate fate decisions in premigratory NC. Their timely downregulation in the dorsal neural tube is thus necessary for the switch between neural and melanocytic phases of NC development.