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Complex intrinsic and extrinsic mechanisms determine neural cell fate during development of the nervous system. Using Id4 deficient mice, we show that Id4 is required for normal development of the central nervous system (CNS), timing neural differentiation in the developing forebrain. In the absence of Id4, the ventricular zone of the neocortex, future hippocampus as well as lateral and medial ganglionic eminences exhibited a 20-30% reduction in mitotic neural precursor cells (NPCs). Although the number of apoptotic cells was significantly increased, the neocortex of Id4(-/-) embryos was consistently thicker due to premature neuronal differentiation, which resulted in an increase in early-born neurons in the adult Id4(-/-) cortex. Late-born cortical neurons and astrocytes in the cortex, septum, hippocampus and caudate putamen of Id4(-/-) adult brains were decreased, however, likely due to the depletion of the NPC pool. Consequently, adult Id4(-/-) brains were smaller and exhibited enlarged ventricles. In vitro analysis of neurosphere cultures revealed that proliferation of Id4-deficient NPCs was impaired and that BMP2-mediated astrocyte differentiation was accelerated in the absence of Id4. Together, these in vivo and in vitro data suggest a crucial role for Id4 in regulating NPC proliferation and differentiation.