BACKGROUND: The interplay between growth factors and transcription factors in vertebrate neurogenesis is poorly understood. MASH1 is a basic helix-loop-helix (bHLH) transcription factor that is essential for autonomic neurogenesis. Bone morphogenetic protein (BMP) 2, and its relative BMP4, have been shown to induce expression of MASH1 and to promote autonomic neuronal differentiation in neural crest stem cells. The relationship between expression of MASH1 and the neurogenic competence of neural crest cells has not been investigated, however. RESULTS: We have examined the function of MASH1 in neurogenic competence using a population of immuno-isolated neural-crest-derived progenitor cells. Post-migratory neural crest cells isolated from fetal rat gut expressed Mash1, yet comprised a mixture of committed neuronal precursors and non-neuronal cells. The non-neuronal cells remained competent to differentiate to neurons, however, if challenged with BMP2. Such competence declines with time and is paralleled by a decline in Mash1 expression in the cells. Expression of endogenous Mash1 can be maintained by BMP2; in turn, constitutive expression of Mash1 from a retroviral vector maintains competence for neuronal differentiation in response to late addition of BMP2. CONCLUSIONS: These data suggest that MASH1 promotes competence for neurogenesis, in a manner similar to its homologs, the proneural genes achaete-scute in Drosophila. They also reveal an unexpected feedback interaction between BMP2 and MASH1 during neuronal differentiation. MASH1 may play multiple roles at successive stages of development within a neurogenic lineage, only one of which is revealed by a loss-of-function mutation.