The murine frontal bone derives entirely from the cranial neural crest (CNC) and consists of the calvarial (lateral) aspect that covers the frontal lobe of brain and the orbital aspect that forms the roof of bony orbit. TGFbeta and FGF signaling have important regulatory roles in postnatal calvarial development. Our previous study has demonstrated that conditional inactivation of Tgfbr2 in the neural crest results in severe defects in calvarial development, although the cellular and molecular mechanisms by which TGFbeta signaling regulates the fate of CNC cells during frontal bone development remain unknown. Here, we show that TGFbeta IIR is required for proliferation of osteoprogenitor cells in the CNC-derived frontal bone anlagen. FGF acts downstream of TGFbeta signaling in regulating CNC cell proliferation, and exogenous FGF2 rescues the cell proliferation defect in the frontal primordium of Tgfbr2 mutant. Furthermore, the CNC-derived frontal primordium requires TGFbeta IIR to undergo terminal differentiation. However, this requirement is restricted to the developing calvarial aspect of the frontal bone, whereas the orbital aspect forms despite the ablation of Tgfbr2 gene, implying a differential requirement for TGFbeta signaling during the development of various regions of the frontal bone. This study demonstrates the biological significance of TGFbeta-mediated FGF signaling cascade in regulating frontal bone development, suggests that TGFbeta functions as a morphogen in regulating the fate of the CNC-derived osteoblast and provides a model for investigating abnormal craniofacial development.