Neural stem cells (NSCs) play essential roles in nervous system development and postnatal neuroregeneration and their deregulation underlies the development of neurodegenerative disorders. Yet how NSC proliferation and differentiation are controlled is not fully understood. Here we present evidence that tumor suppressor p53 regulates NSC proliferation and differentiation via the bone morphogenetic proteins (BMP)-Smad1 pathway and its target gene inhibitor of DNA binding 1 (Id1). p53 deficiency led to increased neurogenesis in vivo, and biased neuronal differentiation and augmented NSC proliferation of ex vivo NSCs. This is accompanied by elevated Smad1 expression/activation in the brain and NSC, which contributes to accelerated neuronal differentiation of p53(-/-) NSCs. p53 deficiency also leads to upregulation of Id1, whose expression is repressed by p53 in BMP-Smad1-dependent and -independent manners. Elevated Id1 expression contributes to augmented proliferation and, unexpectedly, accelerated neuronal differentiation of p53(-/-) NSCs as well. This study reveals a molecular mechanism by which tumor suppressor p53 controls NSC proliferation and differentiation and establishes a connection between p53 and Id1.