Proliferation of neural crest (NC) stem cells and their subsequent differentiation into different neural cell types are key early events in the development of the peripheral nervous system. Soluble growth factors present at the sites where NC cells migrate are critical to the development of NC derivatives in each part of the body. In the present study, we further investigate the effect of microenvironmental factors on quail trunk NC development. We show for the first time that EGF induces differentiation of NC to the neuronal and melanocytic phenotypes, while fibroblast growth factor 2 (FGF2) promotes NC differentiation to Schwann cells. In the presence of both EGF and FGF2, the neuronal differentiation predominates. Our results suggest that FGF2 stimulates gliogenesis, while EGF promotes melanogenesis and neurogenesis. The combination of both growth factors stimulates neurogenesis. These findings suggest that these two growth factors may play an important role in the fate decision of NC progenitors and in the development of the peripheral nervous system.