Neurogenesis in the developing neocortex is a strictly regulated process of cell division and differentiation. Here we report that a gradual retreat of canonical Wnt signaling in the cortex from lateral-to-medial and anterior-to-posterior is a prerequisite of neurogenesis. Ectopic expression of a beta-catenin/LEF1 fusion protein maintains active canonical Wnt signaling in the developing cortex and delays the expression onset of the neurogenic factors Pax6, Ngn2 and Tbr2 and subsequent neurogenesis. Contrary to this, conditional ablation of beta-catenin accelerates expression of the same neurogenic genes. Furthermore, we show that a sustained canonical Wnt activity in the lateral cortex gives rise to cells with hippocampal characteristics in the cortical plate at the expense of the cortical fate, and to cells with dentate gyrus characteristics in the hippocampus. This suggests that the dose of canonical Wnt signaling determines cellular fate in the developing cortex and hippocampus, and that recession of Wnt signaling acts as a morphogenetic gradient regulating neurogenesis in the cortex.