Rat hippocampal precursor cells isolated from hippocampi of embryonic day 16.5 (E16.5) rat embryos were found to proliferate in the presence of basic fibroblast growth factor. Addition of soluble neural cell adhesion molecule (NCAM) to these precursor cells reduced cell proliferation in a dose dependent manner and enhanced the induction of precursor cells' differentiation to the neuronal lineage. Given these findings that NCAM induces the differentiation of hippocampal precursor cells, we investigated possible effects of NCAM on the expression of basic helix-loop-helix (bHLH) transcription factors during the differentiation. Soluble NCAM upregulated the transcription of bHLH transcription factors, neurogenin1 and NeuroD, but decreased HES5. Western blot analysis showed that NCAM increased the expression levels of CaMKII, p-MAPK, GluR1 and NR1 but decreased p-STAT3. These results support a role for NCAM in the inhibition of proliferation and the induction of neural differentiation of hippocampal neural precursor cells, and act as developmental regulators of the bHLH families, ultimately leading to the generation of glutamatergic neural cell types in the differentiation of hippocampal precursor cells.