Pax3-deficient Splotch mice display neural tube defects and an array of neural crest related abnormalities including defects in the cardiac outflow tract, dorsal root ganglia and pigmentation. Pax3 is expressed in neural crest cells that emerge from the dorsal neural tube. Pax3 is also expressed in the somites, through which neural crest cells migrate, where it is required for hypaxial muscle development. Homozygous mutant Splotch embryos die by embryonic day 14. We have utilized the proximal 1.6 kb Pax3 promoter and upstream regulatory elements to engineer transgenic mice reproducing endogenous Pax3 expression in neural tube and neural crest, but not the somite. Over expression of Pax3 in these tissues reveals no discernible phenotype. Breeding of transgenic mice onto a Splotch background demonstrates that neural tube and neural crest expression of Pax3 is sufficient to rescue neural tube closure, cardiac development and other neural crest related defects. Transgenic Splotch mice survive until birth at which time they succumb to respiratory failure secondary to absence of a muscular diaphragm. Limb muscles are also absent. These results indicate that regulatory elements sufficient for functional expression of Pax3 required for cardiac development and neural tube closure are contained within the region 1.6 kb upstream of the Pax3 transcriptional start site. In addition, the single Pax3 isoform used for this transgene is sufficient to execute these developmental processes. Although the extracellular matrix and the environment of the somites through which neural crest migrates is known to influence neural crest behavior, our results indicate that Pax3-deficient somites are capable of supporting proper neural crest migration and function suggesting a cell autonomous role for Pax3 in neural crest.