Rat neural crest stem cells (NCSCs) prospectively isolated from uncultured E14.5 sciatic nerve and transplanted into chick embryos generate fewer neurons than do NCSCs isolated from E10.5 neural tube explants. In addition, they differentiate primarily to cholinergic parasympathetic neurons, although in culture they can also generate noradrenergic sympathetic neurons. This in vivo behavior can be explained, at least in part, by a reduced sensitivity of sciatic nerve-derived NCSCs to the neurogenic signal BMP2 and by the observation that cholinergic neurons differentiate at a lower BMP2 concentration than do noradrenergic neurons in vitro. These results demonstrate that neural stem cells can undergo cell-intrinsic changes in their sensitivity to instructive signals, while maintaining multipotency and self-renewal capacity. They also suggest that the choice between sympathetic and parasympathetic fates may be determined by the local concentration of BMP2.