Disruption of human neural precursor proliferation can give rise to a small brain (microcephaly), and failure of neurons to migrate properly can lead to an abnormal arrest of cerebral cortical neurons in proliferative zones near the lateral ventricles (periventricular heterotopia). Here we show that an autosomal recessive condition characterized by microcephaly and periventricular heterotopia maps to chromosome 20 and is caused by mutations in the gene ADP-ribosylation factor guanine nucleotide-exchange factor-2 (ARFGEF2). By northern-blot analysis, we found that mouse Arfgef2 mRNA levels are highest during embryonic periods of ongoing neuronal proliferation and migration, and by in situ hybridization, we found that the mRNA is widely distributed throughout the embryonic central nervous system (CNS). ARFGEF2 encodes the large (>200 kDa) brefeldin A (BFA)-inhibited GEF2 protein (BIG2), which is required for vesicle and membrane trafficking from the trans-Golgi network (TGN). Inhibition of BIG2 by BFA, or by a dominant negative ARFGEF2 cDNA, decreases cell proliferation in vitro, suggesting a cell-autonomous regulation of neural expansion. Inhibition of BIG2 also disturbed the intracellular localization of such molecules as E-cadherin and beta-catenin by preventing their transport from the Golgi apparatus to the cell surface. Our findings show that vesicle trafficking is an important regulator of proliferation and migration during human cerebral cortical development.