Trunk neural crest (NC) cells differentiate to neurons, melanocytes, and glia. In NC cultures, cyclic AMP (cAMP) induces melanocyte differentiation while suppressing the neuronal sympathoadrenal lineage, depending on the signal intensity. Melanocyte differentiation requires activation of CREB and cAMP-dependent protein kinase A (PKA), but the role of PKA is not understood. We have demonstrated, in NC cultures, cAMP-induced transcription of the microphthalmia-associated transcription factor gene (Mitf) and the RE-1 silencing transcription factor gene (REST), both Wnt-regulated genes. In NC cultures and zebrafish, knockdown of the corepressor of Wnt-mediated transcription C-terminal binding protein 2 (CtBP2) but not CtBP1 derepressed Mitf and REST expression and enhanced melanocyte differentiation. cAMP in NC and B16 melanoma cells decreased CtBP2 protein levels, while inhibition of PKA or proteasome rescued CtBP2 degradation. Interestingly, knockdown of homeodomain-interacting protein kinase 2 (HIPK2), a CtBP stability modulator, increased CtBP2 levels, suppressed expression of Mitf, REST, and melanocyte differentiation, and increased neuronal gene expression and sympathoadrenal lineage differentiation. We conclude that cAMP/PKA via HIPK2 promotes CtBP2 degradation, leading to Mitf and REST expression. Mitf induces melanocyte specification, and REST suppresses neuron-specific gene expression and the sympathoadrenal lineage. Our studies identify a novel role for REST in NC cell differentiation and suggest cross talk between cAMP and Wnt signaling in NC lineage specification.