The neural crest-derived cells that colonize the fetal bowel become patterned into two ganglionated plexuses. The hypothesis that bone morphogenetic proteins (BMPs) promote ganglionation by regulating neural cell adhesion molecule (NCAM) polysialylation was tested. Transcripts encoding the sialyltransferases, ST8Sia IV (PST) and ST8Sia II (STX), which polysialylate NCAM, were detectable in fetal rat gut by E12 but were downregulated postnatally. PSA-NCAM-immunoreactive neuron numbers, but not those of NCAM, were developmentally regulated similarly. Circular smooth muscle was transiently (E16-20) PSA-NCAM-immunoreactive when it is traversed by migrating precursors of submucosal neurons. Neurons developing in vitro from crest-derived cells immunoselected at E12 with antibodies to p75(NTR) expressed NCAM and PSA-NCAM. BMP-4 promoted neuronal NCAM polysialylation and clustering. N-butanoylmannosamine, which blocks NCAM polysialylation, but not N-propanoylmannosamine, which does not, interfered with BMP-4-induced neuronal clustering. Observations suggest that BMP signaling enhances NCAM polysialylation, which allows precursors to migrate and form ganglionic aggregates during the remodeling of the developing ENS.