Schwann cell precursors from nerve innervation are a cellular origin of melanocytes in skin.
Current opinion holds that pigment cells, melanocytes, are derived from neural crest cells produced at the dorsal neural tube and that migrate under the epidermis to populate all parts of the skin. Here, we identify growing nerves projecting throughout the body as a stem/progenitor niche containing Schwann cell precursors (SCPs) from which large numbers of skin melanocytes originate. SCPs arise as a result of lack of neuronal specification by Hmx1 homeobox gene function in the neural crest ventral migratory pathway. Schwann cell and melanocyte development share signaling molecules with both the glial and melanocyte cell fates intimately linked to nerve contact and regulated in an opposing manner by Neuregulin and soluble signals including insulin-like growth factor and platelet-derived growth factor. These results reveal SCPs as a cellular origin of melanocytes, and have broad implications on the molecular mechanisms regulating skin pigmentation during development, in health and pigmentation disorders.