Bone morphogenetic protein (BMP) signaling is essential for neural crest development in several vertebrates. Genetic experiments in the mouse have shown that Bmp2 is essential for the genesis of migratory neural crest cells. Using several markers and a transgenic reporter approach, we now show that neural crest cells are induced in Bmp2 null mutant embryos, but that these cells fail to migrate out of the neural tube. The absence of migratory neural crest cells in these mutants is not due to their elimination by cell death. The neuroectoderm of Bmp2^−/− embryos fail to close and create abnormal folds both along the anterior–posterior and medio–lateral axes, which are associated with an apparent medio–lateral expansion of the neural tube. Finally, our data suggest that the molecular cascade downstream of BMP signaling in early neural crest development may be different in mouse and avian embryos. Developmental Dynamics 236:2493–2501, 2007. © 2007 Wiley‐Liss, Inc.