Melanocytes, the pigment-producing cells, arise from multipotent neural crest (NC) cells during embryogenesis. Many genes required for melanocyte development were identified using mouse pigmentation mutants. The variable spotting mouse pigmentation mutant arose spontaneously at the Jackson Laboratory. We identified a G-to-A nucleotide transition in exon 3 of the Ets1 gene in variable spotting, which results in a missense G102E mutation. Homozygous variable spotting mice exhibit sporadic white spotting. Similarly, mice carrying a targeted deletion of Ets1 exhibit hypopigmentation; nevertheless, the function of Ets1 in melanocyte development is unknown. The transcription factor Ets1 is widely expressed in developing organs and tissues, including the NC. In the chick, Ets1 is required for the expression of Sox10, a transcription factor critical for the development of various NC derivatives, including melanocytes. We show that Ets1 is required early for murine NC cell and melanocyte precursor survival in vivo. Given the importance of Ets1 for Sox10 expression in the chick, we investigated a potential genetic interaction between these genes by comparing the hypopigmentation phenotypes of single and double heterozygous mice. The incidence of hypopigmentation in double heterozygotes was significantly greater than in single heterozygotes. The area of hypopigmentation in double heterozygotes was significantly larger than would be expected from the addition of the areas of hypopigmentation of single heterozygotes, suggesting that Ets1 and Sox10 interact synergistically in melanocyte development. Since Sox10 is also essential for enteric ganglia development, we examined the distal colons of Ets1 null mutants and found a significant decrease in enteric innervation, which was exacerbated by Sox10 heterozygosity. At the molecular level, Ets1 was found to activate an enhancer critical for Sox10 expression in NC-derived structures. Furthermore, enhancer activation was significantly inhibited by the variable spotting mutation. Together, these results suggest that Ets1 and Sox10 interact to promote proper melanocyte and enteric ganglia development from the NC.