In vertebrate embryos, diversification of the lineages arising from the neural crest (NC) is controlled to a large extent by environmental factors. In previous work, we showed that endothelin 3 (ET3) peptide favors the development of glial and melanocytic NC precursors in vitro. This factor is also capable of inducing proliferation of cultured epidermal pigment cells and their conversion to glia. ET3 therefore strongly promotes the emergence of melanocytic and glial phenotypes from precursors and acts on the maintenance of these phenotypes. In the present work, we explored the capacity of ET3 to reprogram glial cells into melanocytes. Schwann cells expressing glial-specific markers [such as the Schwann cell myelin protein (SMP)] were isolated from sciatic nerves of quail embryos and cultured in vitro. We found that ET3 promotes cell growth and sequential expression of melanocyte differentiation markers in cultures of purified SMP-expressing cells, whereas it had no significant effect on SMP-negative cells from the same nerves. Moreover, we provide evidence for the transition of differentiated Schwann cells to melanocytes in clonal cultures. This transition involves the production of a mixed progeny of melanoblasts/melanocytes, glia, and cells bearing differentiation markers of both phenotypes. Therefore, Schwann cells exposed to ET3 transdifferentiate to melanocytes through reversion to the stage of bipotent glial-melanocytic NC precursors. These findings show that NC-derived pigment and glial cells are phenotypically unstable in vitro and may undergo reversal of precursor hierarchy to function as bipotent stem cells.