Glycogen synthase kinase-3β (GSK-3β) and the orphan nuclear receptor tailless homolog (TLX) are key regulators of hippocampal neurogenesis, which has been reported to be dysregulated in both neurodegenerative and psychiatric disorders. Inflammation is also implicated in the neuropathology of these disorders because of increased levels of the pro-inflammatory cytokine interleukin-1β (IL-1β) in the brain. At elevated levels, IL-1β signaling through the IL-1 receptor type 1 has been shown to be detrimental to hippocampal neurogenesis. TLX is required to maintain neural stem/progenitor cells (NSPCs) in an undifferentiated state and is involved in NSPC fate determination, while GSK-3β negatively regulates Wnt signaling, a vital pathway promoting neurogenesis. This study shows that GSK-3β inhibition using a small-molecule inhibitor and the mood stabilizer lithium restores the IL-1β-induced decrease in NSPC proliferation and neuronal differentiation of embryonic rat hippocampal NSPCs to control levels. The IL-1β-induced effect on NSPCs is paralleled by a decrease in TLX expression that can be prevented by GSK-3β inhibition. The present results suggest that GSK-3β ameliorates the anti-proliferative and pro-gliogenic effects of IL-1β, and that TLX is vulnerable to inflammatory insult. Strategies to reduce GSK-3β activity or to increase TLX expression may facilitate the restoration of hippocampal neurogenesis in neuroinflammatory conditions where neurogenesis is impaired.