During CNS development, the proliferation of progenitors must be coordinated with the pattern of neuronal subtype generation. In the ventral neural tube, Sonic hedgehog acts as a long range morphogen to organise the pattern of cell differentiation by controlling the activity of Gli transcription factors. Here, we provide evidence that the same pathway also acts directly at long range to promote the proliferation and survival of progenitor cells. Blockade of Shh signaling or inhibition of Gli activity results in cell autonomous decreases in progenitor proliferation and survival. Conversely, positive Gli activity promotes proliferation and rescues the effects of inhibiting Shh signaling. Analysis of neural cells indicates that Shh/Gli signaling regulates the G1 phase of cell cycle and the expression of the anti-apoptotic factor Bcl2. Furthermore, Shh signaling independently regulates patterning, proliferation and survival of neural cells, thus Shh/Gli activity couples these separate cellular responses of progenitors to coordinate neural development.