OASIS is a member of the CREB/ATF family of transcription factors and modulates cell- or tissue-specific unfolded protein response signalling. Here we show that this modulation has a critical role in the differentiation of neural precursor cells into astrocytes. Cerebral cortices of mice specifically deficient in OASIS (Oasis(-/-)) contain fewer astrocytes and more neural precursor cells than those of wild-type mice during embryonic development. Furthermore, astrocyte differentiation is delayed in primary cultured Oasis(-/-) neural precursor cells. The transcription factor Gcm1, which is necessary for astrocyte differentiation in Drosophila, is revealed to be a target of OASIS. Introduction of Gcm1 into Oasis(-/-) neural precursor cells improves the delayed differentiation of neural precursor cells into astrocytes by accelerating demethylation of the Gfap promoter. Gcm1 expression is temporally controlled by the unfolded protein response through interactions between OASIS family members during astrocyte differentiation. Taken together, our findings demonstrate a novel mechanism by which OASIS and its associated family members are modulated by the unfolded protein response to finely control astrocyte differentiation.