Neural crest progenitor cells, which give rise to many ectodermal and mesodermal derivatives, must maintain a delicate balance of apoptosis and proliferation for their final tissue contributions. Here we show that zebrafish bmp5 is expressed in neural crest progenitor cells and that it activates the Smad and Erk signaling pathways to regulate cell survival and proliferation, respectively. Loss-of-function analysis showed that Bmp5 was required for cell survival and this response is mediated by the Smad-Msxb signaling cascade. However, the Bmp5-Smad-Msxb signaling pathway had no effect on cell proliferation. In contrast, Bmp5 was sufficient to induce cell proliferation through the Mek-Erk-Id3 signaling cascade, whereas disruption of this signaling cascade had no effect on cell survival. Taken together, our results demonstrate an important regulatory mechanism for bone morphogenic protein-initiated signal transduction underlying the formation of neural crest progenitors. Stem Cells 2017;35:1003-1014.