The neurocranium generates most of the craniofacial skeleton and consists of prechordal and postchordal regions. Although development of the prechordal is well studied, little is known of the postchordal region. Here we characterize a signaling hierarchy necessary for postchordal neurocranial development involving Fibroblast growth factor (Fgf) signaling for early specification of mesodermally-derived progenitor cells. The expression of hyaluron synthetase 2 (has2) in the cephalic mesoderm requires Fgf signaling and Has2 function, in turn, is required for postchordal neurocranial development. While Hedgehog (Hh)-deficient embryos also lack a postchordal neurocranium, this appears primarily due to a later defect in chondrocyte differentiation. Inhibitor studies demonstrate that postchordal neurocranial development requires early Fgf and later Hh signaling. Collectively, our results provide a mechanistic understanding of early postchordal neurocranial development and demonstrate a hierarchy of signaling between Fgf and Hh in the development of this structure.