The most common forms of neurocristopathy in the autonomic nervous system are Hirschsprung disease (HSCR), resulting in congenital loss of enteric ganglia, and neuroblastoma (NB), childhood tumors originating from the sympathetic ganglia and adrenal medulla. The risk for these diseases dramatically increases in patients with congenital central hypoventilation syndrome (CCHS) harboring a nonpolyalanine repeat expansion mutation of the Paired-like homeobox 2b (PHOX2B) gene, but the molecular mechanism of pathogenesis remains unknown. We found that introducing nonpolyalanine repeat expansion mutation of the PHOX2B into the mouse Phox2b locus recapitulates the clinical features of the CCHS associated with HSCR and NB. In mutant embryos, enteric and sympathetic ganglion progenitors showed sustained sex-determining region Y (SRY) box10 (Sox10) expression, with impaired proliferation and biased differentiation toward the glial lineage. Nonpolyalanine repeat expansion mutation of PHOX2B reduced transactivation of wild-type PHOX2B on its known target, dopamine β-hydroxylase (DBH), in a dominant-negative fashion. Moreover, the introduced mutation converted the transcriptional effect of PHOX2B on a Sox10 enhancer from repression to transactivation. Collectively, these data reveal that nonpolyalanine repeat expansion mutation of PHOX2B is both a dominant-negative and gain-of-function mutation. Our results also demonstrate that Sox10 regulation by PHOX2B is pivotal for the development and pathogenesis of the autonomic ganglia.