Long noncoding RNAs (lncRNAs) are emerging as key regulators of crucial cellular processes. However, the molecular mechanisms of many lncRNA functions remain uncharacterized. Sox2ot is an evolutionarily conserved lncRNA that transcriptionally overlaps the pluripotency gene Sox2, which maintains the stemness of embryonic stem cells and tissue-specific stem cells. Here, we show that Sox2ot is expressed in the developing mouse cerebral cortex, where it represses neural progenitor (NP) proliferation and promotes neuronal differentiation. Sox2ot negatively regulates self-renewal of neural stem cells, and is predominately expressed in the nucleus and inhibits Sox2 levels. Sox2ot forms a physical interaction with a multifunctional transcriptional regulator YY1, which binds several CpG islands in the Sox2 locus in a Sox2ot-dependent manner. Similar to Sox2ot, YY1 represses NP expansion in vivo. These results demonstrate a regulatory role of Sox2ot in promoting cortical neurogenesis, possibly by repressing Sox2 expression in NPs, through interacting with YY1.