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Cardiac neural crest cells are multipotent migratory cells that contribute to the formation of the cardiac outflow tract and pharyngeal arch arteries. Neural crest-related developmental defects account for a large proportion of congenital heart disorders. Recently, the genetic bases for some of these disorders have been elucidated, and signaling pathways required for induction, migration and differentiation of cardiac neural crest have emerged. Bone morphogenetic proteins comprise a family of secreted ligands implicated in numerous aspects of organogenesis, including heart and neural crest development. However, it has remained generally unclear whether BMP ligands act directly on neural crest or cardiac myocytes during cardiac morphogenesis, or function indirectly by activating other cell types. Studies on BMP receptor signaling during organogenesis have been hampered by the fact that receptor knockouts often lead to early embryonic lethality. We have used a Cre/loxP system for neural crest-specific deletion of the type I receptor, ALK2, in mouse embryos. Mutant mice display cardiovascular defects, including persistent truncus arteriosus, and abnormal maturation of the aortic arch reminiscent of common forms of human congenital heart disease. Migration of mutant neural crest cells to the outflow tract is impaired, and differentiation to smooth muscle around aortic arch arteries is deficient. Moreover, in Alk2 mutants, the distal outflow tract fails to express Msx1, one of the major effectors of BMP signaling. Thus, the type I BMP receptor ALK2 plays an essential cell-autonomous role in the development of the cardiac outflow tract and aortic arch derivatives.