The earliest radial glia are neural stem cells that guide neural cell migration away from ventricular zones. Subsequently, radial glia become lineage restricted during development before they differentiate into more mature cell types in the CNS. We have previously shown that subpopulations of radial glial cells express markers for glial and neuronal restricted precursors (GRPs and NRPs) in expression patterns that are temporally and spatially regulated during CNS development. To characterize further the mechanism of this regulation in rat forebrain, we tested whether secreted factors that are present during development effect lineage restriction of radial glia. We show here that in radial glial cultures LIF/CNTF up-regulates, whereas BMP2 down-regulates GRP antigens recognized by monoclonal antibodies A2B5/4D4. These activities combined with secretion of BMPs dorsally and LIF/CNTF from the choroid plexus provide an explanation for the graded distribution pattern of A2B5/4D4 in dorso-lateral ventricular regions in vivo. The regulation by LIF/CNTF of A2B5/4D4 is mediated through the JAK-STAT pathway. BMP2 promotes expression on radial glial cells of the NRP marker polysialic acid most likely by regulating N-CAM expression itself, as well as at least one polysialyl transferase responsible for synthesis of polysialic acid on N-CAM. Taken together, these results suggest that generation of lineage-restricted precursors is coordinately regulated by gradients of the secreted factors BMPs and LIF/CNTF during development of dorsal forebrain. © 2006 Wiley-Liss, Inc.