Melanocytes in the skin are derived from the embryonic neural crest. Recently, mutations in endothelin 3 and the endothelin receptor B genes have been shown to result in gross pigment defects, indicating that this signalling pathway is required for melanocyte development. We have examined the effects of endothelins on melanocyte progenitors in cultures of mouse neural crest. Firstly, they stimulate an increase in progenitor number and act synergistically with another factor, Steel factor, in the survival and proliferation of the progenitors. These findings are consistent with findings from mice with natural mutations in the endothelin receptor B gene, which show an early loss of melanocyte progenitors. Secondly, endothelins induce differentiation of the progenitors into fully mature pigmented melanocytes. This finding is consistent with the expression of endothelins in the skin of mice at the initiation of pigmentation. The melanocytes generated in endothelin-treated cultures also become responsive to α melanocyte-stimulating hormone, which then acts to regulate the activity of the pigmentation pathway. These findings indicate two key roles for endothelin in melanocyte development: regulation of expansion of the progenitor pool and differentiation of progenitors into mature melanocytes.