Hypoxia-inducible factor 1α (HIF-1α) is essential for vascular development during embryogenesis and pathogenesis. However, little is known about its role in brain development. To investigate the function of HIF-1α in the central nervous system, a conditional knockout mouse was made with the Cre/LoxP system with a nestin promoter-driven Cre. Neural cell-specific HIF-1α-deficient mice exhibit hydrocephalus accompanied by a reduction in neural cells and an impairment of spatial memory. Apoptosis of neural cells coincided with vascular regression in the telencephalon of mutant embryos, and these embryonic defects were successfully restored by in vivo gene delivery of HIF-1α to the embryos. These results showed that expression of HIF-1α in neural cells was essential for normal development of the brain and established a mouse model that would be useful for the evaluation of therapeutic strategies for ischemia, including hypoxia-mediated hydrocephalus.