The neural crest is a transient structure in vertebrate embryos that generates multiple neural and mesenchymal cell types as well as melanocytes. Melanocytes in the skin either derive directly from neural crest cells populating the skin via a dorsolateral migratory pathway or arise by detaching from nerves innervating the skin. Several transcription factors, such as FoxD3, Sox10, Pax3, and Mitf, take part in a genetic network regulating melanocyte formation from the neural crest. The activity of these intrinsic factors is controlled and modulated by extracellular signals including canonical Wnt, Edn, Kitl, and other signals that remain to be identified. Here, we summarize the current view of how melanocytes are specified from the neural crest and put this process into the context of spatiotemporal lineage decisions in neural crest cells.