A better understanding of the control of stem cell maintenance and differentiation fate choice is fundamental to effectively realising the potential of human pluripotent stem cells in disease modelling, drug screening and cell therapy. Dlk1 is a Notch related transmembrane protein that has been reportedly expressed in several neurogenic regions in the developing brain. In this study, we investigated the ability of Dlk1 in modulating the maintenance and differentiation of human and mouse ESC-derived neural progenitors. We found that DLK1, either employed as an extrinsic factor, or via transgene expression, consistently promoted the generation of neurons in both the mouse and human ESC-derived neural progenitors. DLK1 exerts this function by inducing cell cycle exit of the progenitors, as evidenced by an increase in the number of young neurons retaining BrdU labelling and cells expressing the cycling inhibitor P57Kip2. DLK1 antagonised the cell proliferation activity of Notch ligands Delta 1 and Jagged and inhibited Hes1-mediated Notch signaling as demonstrated by a luciferase reporter assay. Interestingly, we found that DLK1 promotes the neurogenic potential of human neural progenitor cells via suppression of Smad activation when they are challenged with BMP. Together, our data demonstrate for the first time a regulatory role for DLK1 in human and mouse neural progenitor differentiation and establish an interaction between DLK1 and Hes1-mediated Notch signaling in these cells. Furthermore, this study identifies DLK1 as a novel modulator of BMP/Smad signalling.