The zebrafish pharyngeal cartilage is derived from the pharyngeal apparatus, a vertebrate-specific structure derived from all three germ layers. Developmental aberrations of the pharyngeal apparatus lead to birth defects such as Treacher-Collins and DiGeorge syndromes. While interactions between endoderm and neural crest (NC) are known to be important for cartilage formation, the full complement of molecular players involved and their roles remain to be elucidated. Activated leukocyte cell adhesion molecule a (alcama), a member of the immunoglobulin (Ig) superfamily, is among the prominent markers of pharyngeal pouch endoderm, but to date no role has been assigned to this adhesion molecule in the development of the pharyngeal apparatus. Here we show that alcama plays a crucial, non-autonomous role in pharyngeal endoderm during zebrafish cartilage morphogenesis. alcama knockdown leads to defects in NC differentiation, without affecting NC specification or migration. These defects are reminiscent of the phenotypes observed when Endothelin 1 (Edn1) signaling, a key regulator of cartilage development is disrupted. Using gene expression analysis and rescue experiments we show that Alcama functions downstream of Edn1 signaling to regulate NC differentiation and cartilage morphogenesis. In addition, we also identify a role for neural adhesion molecule 1.1 (nadl1.1), a known interacting partner of Alcama expressed in neural crest, in NC differentiation. Our data shows that nadl1.1 is required for alcama rescue of NC differentiation in edn1(-/-) mutants and that Alcama interacts with Nadl1.1 during chondrogenesis. Collectively our results support a model by which Alcama on the endoderm interacts with Nadl1.1 on NC to mediate Edn1 signaling and NC differentiation during chondrogenesis.