Neural stem cells persist after embryonic development in the subventricular zone (SVZ) niche and produce new neural cells during postnatal life; ependymal cells are a key component associated with this neurogenic niche. In the animal model of human hydrocephalus, the hyh mouse, the ependyma of the lateral ventricles is progressively lost during late embryonic and early postnatal life and disappears from most of the ventricular surface throughout its life span. To determine the potential consequences of this loss on the SVZ, we characterized the abnormalities in this neurogenic niche in hyh mice. There was overall disorganization and a marked reduction of proliferative cells in the SVZ of both newborn and adult hyh hydrocephalic mice in vivo; neuroblasts were displaced to the ventricular surface, and their migration through the rostral migratory stream was reduced. The numbers of resident neural progenitor cells in hyh mice were also markedly reduced, but they were capable of proliferating, forming neurospheres, and differentiating into neurons and glia in vitro in a manner indistinguishable from that of wild-type progenitor cells. These findings suggest that the reduction of proliferative activity observed in vivo is not caused by a cell autonomous defect of SVZ progenitors but is a consequence of a reduced number of these cells. Furthermore, the overall tissue disorganization of the SVZ and displacement of neuroblasts imply alterations in the neurogenic niche of postnatal hyh mice.