Cyclin-dependent kinase 5 (Cdk5) plays a key role in the development of the mammalian nervous system; it phosphorylates a number of targeted proteins involved in neuronal migration during development to synaptic activity in the mature nervous system. Its role in the initial stages of neuronal commitment and differentiation of neural stem cells (NSCs), however, is poorly understood. In this study, we show that Cdk5 phosphorylation of p27(Kip1) at Thr187 is crucial to neural differentiation because 1) neurogenesis is specifically suppressed by transfection of p27(Kip1) siRNA into Cdk5(+/+) NSCs; 2) reduced neuronal differentiation in Cdk5(-/-) compared with Cdk5(+/+) NSCs; 3) Cdk5(+/+) NSCs, whose differentiation is inhibited by a nonphosphorylatable mutant, p27/Thr187A, are rescued by cotransfection of a phosphorylation-mimicking mutant, p27/Thr187D; and 4) transfection of mutant p27(Kip1) (p27/187A) into Cdk5(+/+) NSCs inhibits differentiation. These data suggest that Cdk5 regulates the neural differentiation of NSCs by phosphorylation of p27(Kip1) at theThr187 site. Additional experiments exploring the role of Ser10 phosphorylation by Cdk5 suggest that together with Thr187 phosphorylation, Ser10 phosphorylation by Cdk5 promotes neurite outgrowth as neurons differentiate. Cdk5 phosphorylation of p27(Kip1), a modular molecule, may regulate the progress of neuronal differentiation from cell cycle arrest through differentiation, neurite outgrowth, and migration.