The Steel mutation is a non-cell-autonomous defect in mice that affects the development of several stem cell populations, including germ cells, hematopoietic cells, and neural crest-derived pigment cells. To characterize the environmental lesion caused by the Steel mutation, we have compared the ability of normal and mutant extracellular matrix material to support the differentiation of normal mouse neural crest cells in vitro. Extracellular matrix deposited by cultured skin cells isolated from normal fetuses enhanced melanogenesis by crest cells over that observed on plastic substrata. In contrast, matrix material produced by Steel-Dickie (Sld) fetal skin cells failed to enhance melanogenesis. Adrenergic differentiation by neural crest-derived cells was promoted equally by both normal and mutant extracellular matrix compared to control substrata. We conclude that the environmental defect in mutant embryos selectively affects a melanogenic subpopulation of neural crest cells and resides, at least in part, in the extracellular matrix.