During development of the cerebral cortex, neural stem cells (NSCs) undergo a temporal switch from proliferative (symmetric) to neuron-generating (asymmetric) divisions. We investigated the role of Schwann cell factor 1 (SC1/PRDM4), a member of the PRDM family of transcription factors, in this critical transition. We discovered that SC1 recruits the chromatin modifier PRMT5, an arginine methyltransferase that catalyzes symmetric dimethylation of histone H4 arginine 3 (H4R3me2s) and that this modification is preferentially associated with undifferentiated cortical NSCs. Overexpressing SC1 in embryonic NSCs led to an increase in the number of Nestin-expressing precursors; mutational analysis of SC1 showed that this was dependent on recruitment of PRMT5. We found that SC1 protein levels are down-regulated at the onset of neurogenesis and that experimental knockdown of SC1 in primary NSCs triggers precocious neuronal differentiation. We propose that SC1 and PRMT5 are components of an epigenetic regulatory complex that maintains the "stem-like" cellular state of the NSC by preserving their proliferative capacity and modulating their cell cycle progression. Our findings provide evidence that histone arginine methylation regulates NSC differentiation.