Relative quiescence and self renewal are defining features of adult stem cells, but their potential coordination remains unclear. Subependymal neural stem cells (NSCs) lacking cyclin-dependent kinase (CDK) inhibitor (CKI) 1a (p21) exhibit rapid expansion that is followed by their permanent loss later in life. Here we demonstrate that transcription of the gene encoding bone morphogenetic protein 2 (Bmp2) in NSCs is under the direct negative control of p21 through actions that are independent of CDK. Loss of p21 in NSCs results in increased levels of secreted BMP2, which induce premature terminal differentiation of multipotent NSCs into mature non-neurogenic astrocytes in an autocrine and/or paracrine manner. We also show that the cell-nonautonomous p21-null phenotype is modulated by the Noggin-rich environment of the subependymal niche. The dual function that we describe here provides a physiological example of combined cell-autonomous and cell-nonautonomous functions of p21 with implications in self renewal, linking the relative quiescence of adult stem cells to their longevity and potentiality.