Integrated development of diverse tissues gives rise to a functional, mobile vertebrate musculoskeletal system. However, the genetics and cellular interactions that drive the integration of muscle, tendon, and skeleton are poorly understood. In the vertebrate head, neural crest cells, from which cranial tendons derive, pattern developing muscles just as tendons have been shown to in limb and trunk tissue, yet the mechanisms of this patterning are unknown. From a forward genetic screen, we determined that cyp26b1 is critical for musculoskeletal integration in the ventral pharyngeal arches, particularly in the mandibulohyoid junction where first and second arch muscles interconnect. Using time-lapse confocal analyses, we detail musculoskeletal integration in wild-type and cyp26b1 mutant zebrafish. In wild-type fish, tenoblasts are present in apposition to elongating muscles and condense in discrete muscle attachment sites. In the absence of cyp26b1, tenoblasts are generated in normal numbers but fail to condense into nascent tendons within the ventral arches and, subsequently, muscles project into ectopic locales. These ectopic muscle fibers eventually associate with ectopic tendon marker expression. Genetic mosaic analysis demonstrates that neural crest cells require Cyp26b1 function for proper musculoskeletal development. Using an inhibitor, we find that Cyp26 function is required in a short time window that overlaps the dynamic window of tenoblast condensation. However, cyp26b1 expression is largely restricted to regions between tenoblast condensations during this time. Our results suggest that degradation of RA by this previously undescribed population of neural crest cells is critical to promote condensation of adjacent scxa-expressing tenoblasts and that these condensations are subsequently required for proper musculoskeletal integration.