The cranial neural crest (CNC) undergoes complex molecular and morphological changes during embryogenesis in order to form the vertebrate skull, and nearly three quarters of all birth defects result from defects in craniofacial development. The molecular events leading to CNC differentiation have been extensively studied; however, the role of the cAMP-dependent protein kinase [protein kinase A (PKA)] during craniofacial development has only been described in palate formation. Here, we provide evidence that strict PKA regulation in postmigratory CNC cells is essential during craniofacial bone development. Selective inactivation of Prkar1a, a regulatory subunit of the PKA holoenzyme, in the CNC results in perinatal lethality caused by dysmorphic craniofacial development and subsequent asphyxiation. Additionally, aberrant differentiation of CNC mesenchymal cells results in anomalous intramembranous ossification characterized by formation of cartilaginous islands in some areas and osteolysis of bony trabeculae with fibrous connective tissue stabilization in others. Genetic interaction studies revealed that genetic reduction of the PKA catalytic subunit C(alpha) was able to rescue the phenotype, whereas reduction in Cbeta had no effect. Overall, these observations provide evidence of the essential role of proper regulation of PKA during the ossification of the bones of the skull. This knowledge may have implications for the understanding and treatment of craniofacial birth defects.