Neuroblastoma (NB), the most common cancer in the first year of life, presents almost exclusively in the trunk. To understand why an early-onset cancer would have such a specific localization, we xenotransplanted human NB cells into discrete neural crest (NC) streams in zebrafish embryos. Here, we demonstrate that human NB cells remain in an undifferentiated, tumorigenic state when comigrating posteriorly with NC cells but, upon comigration into the head, differentiate into neurons and exhibit decreased survival. Furthermore, we demonstrate that this in vivo differentiation requires retinoic acid and brain-derived neurotrophic factor signaling from the microenvironment, as well as cell-autonomous intersectin-1-dependent phosphoinositide 3-kinase-mediated signaling, likely via Akt kinase activation. Our findings suggest a microenvironment-driven explanation for NB’s trunk-biased localization and highlight the potential for induced differentiation to promote NB resolution in vivo.