To directly test the requirement for hedgehog signaling in the telencephalon from early neurogenesis, we examined conditional null alleles of both the Sonic hedgehog and Smoothened genes. While the removal of Shh signaling in these animals resulted in only minor patterning abnormalities, the number of neural progenitors in both the postnatal subventricular zone and hippocampus was dramatically reduced. In the subventricular zone, this was partially attributable to a marked increase in programmed cell death. Consistent with Hedgehog signaling being required for the maintenance of stem cell niches in the adult brain, progenitors from the subventricular zone of floxed Smo animals formed significantly fewer neurospheres. The loss of hedgehog signaling also resulted in abnormalities in the dentate gyrus and olfactory bulb. Furthermore, stimulation of the hedgehog pathway in the mature brain resulted in elevated proliferation in telencephalic progenitors. These results suggest that hedgehog signaling is required to maintain progenitor cells in the postnatal telencephalon.