Neural stem cell (NSC) differentiation is precisely controlled by a network of transcription factors, which themselves are regulated by extracellular signals (Bertrand, N., D.S. Castro, and F. Guillemot, 2002. Nat. Rev. Neurosci 3:517-530; Shirasaki, R. and S.L. Pfaff, 2002. Annu. Rev. Neurosci 25:251-281). One way that the activity of such transcription factors is controlled is by the regulation of their movement between the cytosol and nucleus (Vandromme, M., C. Gauthier-Rouviere, N. Lamb, and A. Fernandez, 1996. Trends Biochem.Sci. 21:59-64; Lei, E.P. and P.A. Silver, 2002. Dev. Cell 2:261-272). Here we show that the basic helix-loop-helix transcription factor OLIG2, which has been shown to be required for motor neuron and oligodendrocyte development, is found in the cytoplasm, but not the nucleus, of astrocytes in culture and of a subset of astrocytes in the subventricular zone. We demonstrate that the accumulation of OLIG2 in the nucleus of NSCs blocks the CNTF-induced astrocyte differentiation and that the translocation of OLIG2 to the cytoplasm is promoted by activated AKT. We propose that the AKT-stimulated export of OLIG2 from the nucleus of NSCs is essential for the astrocyte differentiation.