Neuroblastoma is a pediatric tumor that is thought to arise from autonomic precursors in the neural crest. Mutations in the PHOX2B gene have been observed in familial and sporadic forms of neuroblastoma and represent the first defined genetic predisposition for neuroblastoma. Here, we address the mechanisms that may underlie this predisposition, comparing the function of wild-type and mutant Phox2b proteins ectopically expressed in proliferating, embryonic sympathetic neurons. Phox2b displays a strong antiproliferative effect, which is lost in all Phox2b neuroblastoma variants analyzed. In contrast, an increase in sympathetic neuron proliferation is elicited by Phox2b variants with mutations in the homeodomain when endogenous Phox2b levels are lowered by siRNA-mediated knockdown to mimic the situation of heterozygous PHOX2B mutations in neuroblastoma. The increased proliferation is blocked by Hand2 knockdown and the antiproliferative Phox2b effects are rescued by Hand2 overexpression, implying Hand2 in Phox2b-mediated proliferation control. A Phox2b variant with a nonsense mutation in the homeodomain elicits, in addition, a decreased expression of characteristic marker genes. Together, these results suggest that PHOX2B mutations predispose to neuroblastoma by increasing proliferation and promoting dedifferentiation of cells in the sympathoadrenergic lineage.