That pigment cells in Amblystoma embryos originate in the ganglion crest is indicated by their failure to develop in the trunk region after extirpation of the trunk neural crest (neural folds). Pigment cells develop in explanted pieces of neural crest and fail to develop in explanted flank or limb ectoderm and mesoderm except at late stages. Also, donor type pigmentation develops in heteroplastic grafts of dorsal ectoderm and ganglion crest. This pigmentation persists in most cases after metamorphosis. Typical melanophores are induced in the flank of the white axolotl by grafts of ectoderm from A. punctatum. The transplanted epidermis may supply to the underlying host cells some substance necessary to melanin formation.