Transforming Growth Factor beta (Tgfbeta) and associated signaling effectors are expressed in the forebrain, but little is known about the role of this multifunctional cytokine during forebrain development. Using hippocampal and cortical primary cell cultures of developing mouse brains, this study identified Tgfbeta-regulated genes not only associated with cell cycle exit of progenitors but also with adoption of neuronal cell fate. Accordingly, we observed not only an antimitotic effect of Tgfbeta on progenitors but also an increased expression of neuronal markers in Tgfbeta treated cultures. This effect was dependent upon Smad4. Furthermore, in vivo loss-of-function analyses using Tgfbeta2(-/-)/Tgfbeta3(-/-) double mutant mice showed the opposite effect of increased cell proliferation and fewer neurons in the cerebral cortex and hippocampus. Gata2, Runx1, and Nedd9 were candidate genes regulated by Tgfbeta and known to be involved in developmental processes of neuronal progenitors. Using siRNA-mediated knockdown, we identified Nedd9 as an essential signaling component for the Tgfbeta-dependent increase in neuronal cell fate. Expression of this scaffolding protein, which is mainly described as a signaling molecule of the beta1-integrin pathway, was not only induced after Tgfbeta treatment but was also associated with morphological changes of the Nestin-positive progenitor pool observed upon exposure to Tgfbeta.