The winged-helix or forkhead class of transcription factors has been shown to play important roles in cell specification and lineage segregation. We have cloned the chicken homolog of FoxD3, a member of the winged-helix class of transcription factors, and analyzed its expression. Based on its expression in the dorsal neural tube and in all neural crest lineages except the late-emigrating melanoblasts, we predicted that FoxD3 might be important in the segregation of the neural crest lineage from the neural epithelium, and for repressing melanogenesis in early-migrating neural crest cells. Misexpression of FoxD3 by electroporation in the lateral neural epithelium early in neural crest development produced an expansion of HNK1 immunoreactivity throughout the neural epithelium, although these cells did not undergo an epithelial/mesenchymal transformation. To test whether FoxD3 represses melanogenesis in early migrating neural crest cells, we knocked down expression in cultured neural crest with antisense oligonucleotides and in vivo by treatment with morpholino antisense oligonucleotides. Both experimental approaches resulted in an expansion of the melanoblast lineage, probably at the expense of neuronal and glial lineages. Conversely, persistent expression of FoxD3 in late-migrating neural crest cells using RCAS viruses resulted in the failure of melanoblasts to develop. We suggest that FoxD3 plays two important roles in neural crest development. First, it is involved in the segregation of the neural crest lineage from the neuroepithelium. Second, it represses melanogenesis, thereby allowing other neural crest derivatives to differentiate during the early stages of neural crest patterning.