Abundant cell death is observed when human embryonic stem cells (hESCs) undergo neuralization, a critical first step for future cell-based therapies addressing neurodegeneration. Using hESC neuralization as an in vitro model of human development, we demonstrated that the developing neuroepithelium acquires increased susceptibility to spontaneous cell death. We found that poly(ADP-ribose) polymerase-1 (PARP1)/apoptosis-inducing factor (AIF)-mediated cell death (parthanatos) is a dominant mechanism responsible for cell loss during hESC neuralization. The demise of neural progenitor cells, at least in part, is due to decreased endogenous antioxidant defenses and enhanced reactive oxygen species leakage from mitochondria fuelled by nonphysiological culture conditions. Under such conditions, PARP1 overactivation triggered cell death through the mitochondrial-nuclear translocation of AIF. Blocking PARP1 activity with small hairpin RNA interference or nicotinamide dramatically enhanced hESC neuralization, providing optimal survival of the developing neuroepithelium. Because nicotinamide is a physiological metabolite, our results raise the possibility that neural stem/progenitor cell survival in vivo requires a metabolic niche. We argue that small natural metabolites provide a powerful physiological tool to optimize hESC differentiation compatible with the requirements of regenerative medicine.