Mammalian neural stem cells can develop into a variety of neuronal and glial cell types. This involves a highly coordinated process of differentiation in which the Notch signaling pathway and the system of helix-loop-helix (HLH) transcriptional regulators play a key role. By exercising control over proliferation, initiation of differentiation, neurite outgrowth, and synaptogenesis, the network of HLH transcription factors regulates the fate of neural stem cells and progenitors. Here we show that the HLH transcription factor HES1 regulates the proliferation of human neural stem cells and that blocking its expression stimulates the expression of cyclin-dependent kinase inhibitor p21(CIP1/WAF1). Furthermore, we demonstrate that the suppression of HES1 expression initiates differentiation of neural stem cells into neurons, the majority of which develop the GABAergic phenotype. These findings underscore the importance of the HLH network, and HES1 in particular, in guiding the phenotypic development of neural stem cells.