Mutations in AUTS2 are associated with autism, intellectual disability, and microcephaly. AUTS2 is expressed in the brain and interacts with polycomb proteins, yet it is still unclear how mutations in AUTS2 lead to neurodevelopmental phenotypes. Here we report that when neuronal differentiation is initiated, there is a shift in expression from a long isoform to a short AUTS2 isoform. Yeast two-hybrid screen identified the splicing factor SF3B1 as an interactor of both isoforms, whereas the polycomb group proteins, PCGF3 and PCGF5, were found to interact exclusively with the long AUTS2 isoform. Reporter assays showed that the first exons of the long AUTS2 isoform function as a transcription repressor, but the part that consist of the short isoform acts as a transcriptional activator, both influenced by the cellular context. The expression levels of PCGF3 influenced the ability of the long AUTS2 isoform to activate or repress transcription. Mouse embryonic stem cells (mESCs) with heterozygote mutations in Auts2 had an increase in cell death during in vitro corticogenesis, which was significantly rescued by overexpressing the human AUTS2 transcripts. mESCs with a truncated AUTS2 protein (missing exons 12-20) showed premature neuronal differentiation, whereas cells overexpressing AUTS2, especially the long transcript, showed increase in expression of pluripotency markers and delayed differentiation. Taken together, our data suggest that the precise expression of AUTS2 isoforms is essential for regulating transcription and the timing of neuronal differentiation.