The transcription factor Sox2 is expressed at high levels in neural stem and progenitor cells. Here, we inactivated Sox2 specifically in the developing brain by using Cre–loxP system. Although mutant animals did not survive after birth, analysis of late gestation embryos revealed that loss of Sox2 causes enlargement of the lateral ventricles and a decrease in the number of neurosphere-forming cells. However, although their neurogenic potential is attenuated, Sox2-deficient neural stem cells retain their multipotency and self-renewal capacity. We found that expression level of Sox3 is elevated in Sox2 null developing brain, probably mitigating the effects of loss of Sox2.