A series of transcription factors critical for maintenance of the neural stem cell state have been identified, but the role of functionally important corepressors in maintenance of the neural stem cell state and early neurogenesis remains unclear. Previous studies have characterized the expression of both SMRT (also known as NCoR2, nuclear receptor co-repressor 2) and NCoR in a variety of developmental systems; however, the specific role of the SMRT corepressor in neurogenesis is still to be determined. Here we report a critical role for SMRT in forebrain development and in maintenance of the neural stem cell state. Analysis of a series of markers in SMRT-gene-deleted mice revealed the functional requirement of SMRT in the actions of both retinoic-acid-dependent and Notch-dependent forebrain development. In isolated cortical progenitor cells, SMRT was critical for preventing retinoic-acid-receptor-dependent induction of differentiation along a neuronal pathway in the absence of any ligand. Our data reveal that SMRT represses expression of the jumonji-domain containing gene JMJD3, a direct retinoic-acid-receptor target that functions as a histone H3 trimethyl K27 demethylase and which is capable of activating specific components of the neurogenic program.