Waardenburg-Shah syndrome combines the reduced enteric nervous system characteristic of Hirschsprung's disease with reduced pigment cell number, although the cell biological basis of the disease is unclear. We have analysed a zebrafish Waardenburg-Shah syndrome model. We show that the colourless gene encodes a sox10 homologue, identify sox10 lesions in mutant alleles and rescue the mutant phenotype by ectopic sox10 expression. Using iontophoretic labelling of neural crest cells, we demonstrate that colourless mutant neural crest cells form ectomesenchymal fates. By contrast, neural crest cells which in wild types form non-ectomesenchymal fates generally fail to migrate and do not overtly differentiate. These cells die by apoptosis between 35 and 45 hours post fertilisation. We provide evidence that melanophore defects in colourless mutants can be largely explained by disruption of nacre/mitf expression. We propose that all defects of affected crest derivatives are consistent with a primary role for colourless/sox10 in specification of non-ectomesenchymal crest derivatives. This suggests a novel mechanism for the aetiology of Waardenburg-Shah syndrome in which affected neural crest derivatives fail to be generated from the neural crest.