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The cellular origin and molecular mechanisms regulating pigmentation of head and neck are largely unknown. Melanocyte specification is controlled by the transcriptional activity of Mitf, but no general logic has emerged to explain how Mitf and progenitor transcriptional activities consolidate melanocyte and progenitor cell fates. We show that cranial melanocytes arise from at least two different cellular sources: initially from nerve-associated Schwann cell precursors (SCPs) and later from a cellular source that is independent of nerves. Unlike the midbrain-hindbrain cluster from which melanoblasts arise independently of nerves, a large center of melanocytes in and around cranial nerves IX-X is derived from SCPs, as shown by genetic cell-lineage tracing and analysis of ErbB3-null mutant mice. Conditional gain- and loss-of-function experiments show genetically that cell fates in the neural crest involve both the SRY transcription factor Sox2 and Mitf, which consolidate an SCP progenitor or melanocyte fate by cross-regulatory interactions. A gradual downregulation of Sox2 in progenitors during development permits the differentiation of both neural crest- and SCP-derived progenitors into melanocytes, and an initial small pool of nerve-associated melanoblasts expands in number and disperses under the control of endothelin receptor B (Ednrb) and Wnt5a signaling.

The transcription factor Sox2 is active in neural stem cells, and Sox2`knockdown' mice show defects in neural stem/progenitor cells in the hippocampus and eye, and possibly some neurons. In humans, heterozygous Sox2 deficiency is associated with eye abnormalities, hippocampal malformation and epilepsy. To better understand the role of Sox2, we performed in vitro differentiation studies on neural stem cells cultured from embryonic and adult brains of `knockdown' mutants. Sox2 expression is high in undifferentiated cells, and declines with differentiation, but remains visible in at least some of the mature neurons. In mutant cells, neuronal, but not astroglial,differentiation was profoundly affected. β-Tubulin-positive cells were abundant, but most failed to progress to more mature neurons, and showed morphological abnormalities. Overexpression of Sox2 in neural cells at early,but not late, stages of differentiation, rescued the neuronal maturation defect. In addition, it suppressed GFAP expression in glial cells. Our results show an in vitro requirement for Sox2 in early differentiating neuronal lineage cells, for maturation and for suppression of alternative lineage markers. Finally, we examined newly generated neurons from Sox2 `knockdown'newborn and adult mice. GABAergic neurons were greatly diminished in number in newborn mouse cortex and in the adult olfactory bulb, and some showed abnormal morphology and migration properties. GABA deficiency represents a plausible explanation for the epilepsy observed in some of the knockdown mice, as well as in SOX2-deficient individuals.