BMP signaling is essential for a wide variety of developmental processes. To evaluate the role of Bmp2/4 in cranial neural crest (CNC) formation or differentiation after its migration into the branchial arches, we used Xnoggin to block their activities in specific areas of the CNC in transgenic mice. This resulted in depletion of CNC cells from the targeted areas. As a consequence, the branchial arches normally populated by the affected neural crest cells were hypomorphic and their skeletal and neural derivatives failed to develop. In further analyses, we have identified Bmp2 as the factor required for production of migratory cranial neural crest. Its spatial and temporal expression patterns mirror CNC emergence and Bmp2 mutant embryos lack both branchial arches and detectable migratory CNC cells. Our results provide functional evidence for an essential role of BMP signaling in CNC development.