Neural crest (NC) cells are stem cells that are specified within the embryonic neuroectodermal epithelium and migrate to stereotyped peripheral sites for differentiation into many cell types. Several neurocristopathies involve a deficit of NC-derived cells, raising the possibility of stem cell therapy. In Hirschsprung's disease the distal bowel lacks an enteric nervous system caused by a failure of colonization by NC-derived cells. We have developed a robust method of producing migrating NC-like cells from human embryonic stem cell-derived neural progenitors using a coculture system of mouse embryonic fibroblasts. Significantly, subsequent exposure to Y27632, a small-molecule inhibitor of the Rho effectors ROCKI/II, dramatically increased the efficiency of differentiation into NC-like cells, identified by marker expression in vitro. NC-like cells derived by this method were able to migrate along NC pathways in avian embryos in ovo and within explants of murine bowel, and to differentiate into cells with neuronal and glial markers. This is the first study to report the use of a small molecule to induce cells with NC characteristics from embryonic stem cells that can migrate and generate neurons and support cells in complex tissue. Furthermore, this study demonstrates that small-molecule regulators of ROCKI/II signaling may be valuable tools for stem cell research aimed at treatment of neurocristopathies.