Cranial neural crest cells (cNCC) are a multipotent embryonic cell population that give rise to a diverse set of cell types. These cells are particularly vulnerable to external metabolic stressors, as exemplified by the association between maternal hyperglycemia and congenital malformations. We were interested in studying the effect of various concentrations of glucose and pyruvate on cNCC metabolism, migration, and differentiation using an established murine neural crest cell model (O9-1). We unexpectedly observed a pattern of gene expression suggestive of cholesterol biosynthesis induction under glucose depletion conditions in O9-1 cells. We further showed that treatment with two different cholesterol synthesis inhibitors interfered with cell migration and differentiation, inhibiting chondrogenesis while enhancing smooth muscle cell differentiation. As congenital arhinia (absent external nose), a malformation caused by mutations in SMCHD1, appears to represent, in part, a defect in cNCC, we were also interested in investigating the effects of glucose and cholesterol availability on Smchd1 expression in O9-1 cells. Smchd1 expression was induced under high glucose conditions whereas cholesterol synthesis inhibitors decreased Smchd1 expression during chondrogenesis. These data highlight a novel role for cholesterol biosynthesis in cNCC physiology and demonstrate that human phenotypic variability in SMCHD1 mutation carriers may be related, in part, to SMCHD1’s sensitivity to glucose or cholesterol dosage during development.