Fate-specific differentiation of neural progenitors attracts keen interest in modern medicine due to its application in cell replacement therapy. Though various signaling pathways are involved in maintenance and differentiation of neural progenitors, the mechanism of development of lineage-restricted progenitors from embryonic stem (ES) cells is not clearly understood. Here, we have demonstrated that neuronal vs. glial differentiation potential of ES cell-derived neural progenitors (ES-NPs) are governed by the growth factors, exposed during their proliferation/expansion phase and cannot be significantly altered during differentiation phase. Exposure of ES-NPs to fibroblast growth factor-2 (FGF2) during proliferation triggered the expression of pro-neural genes that are required for neuronal lineage commitment, and upon differentiation, predominantly generated neurons. On the other hand, epidermal growth factor (EGF)-exposed ES-NPs are not committed to neuronal fate due to decreased expression of pro-neural genes. These ES-NPs further generate more glial cells due to expression of glial-restricted factors. Exposure of ES-NPs to the same growth factors during proliferation/expansion and differentiation phase augments the robust differentiation of neurons or glial subtypes. We also demonstrate that, during differentiation, exposure to growth factors other than that in which the ES-NPs were expanded does not significantly alter the fate of ES-NPs. Thus, we conclude that FGF2 and EGF determine the neural vs. glial fate of ES-NPs during proliferation and augment it during differentiation. Further modification of these protocols would help in generating fate-specified neurons for various regenerative therapies.