Nolz-1, as a murine member of the NET zinc-finger protein family, is expressed in post-mitotic differentiating neurons of striatum during development. To explore the function of Nolz-1 in regulating the neurogenesis of forebrain, we studied the effects of ectopic expression of Nolz-1 in neural progenitors. We generated the Cre-loxP dependent conditional transgenic mice in which Nolz-1 was ectopically expressed in proliferative neural progenitors. Ectopic expression of Nolz-1 in neural progenitors by intercrossing the Nolz-1 conditional transgenic mice with the nestin-Cre mice resulted in hypoplasia of telencephalon in double transgenic mice. Decreased proliferation of neural progenitor cells were found in the telencephalon, as evidenced by the reduction of BrdU-, Ki67- and phospho-histone 3-positive cells in E11.5-12.5 germinal zone of telencephalon. Transgenic Nolz-1 also promoted cell cycle exit and as a consequence might facilitate premature differentiation of progenitors, because TuJ1-positive neurons were ectopically found in the ventricular zone and there was a general increase of TuJ1 immunoreactivity in the telencephalon. Moreover, clusters of strong TuJ1-expressing neurons were present in E12.5 germinal zone. Some of these strong TuJ1-positive clusters, however, contained apoptotic condensed DNA, suggesting that inappropriate premature differentiation may lead to abnormal apoptosis in some progenitor cells. Consistent with the transgenic mouse analysis in vivo, similar effects of Nozl-1 over-expression in induction of apoptosis, inhibition of cell proliferation and promotion of neuronal differentiation were also observed in three different N18, ST14A and N2A neural cell lines in vitro. Taken together, our study indicates that ectopic expression of Nolz-1 in neural progenitors promotes cell cycle exit/premature neuronal differentiation and induces abnormal apoptosis in the developing telencephalon.