Neural stem cells in the subventricular zone (SVZ) continue to generate new neurons in the adult brain. SVZ cells exposed to EGF in culture grow to form neurospheres that are multipotent and self-renewing. We show here that the majority of these EGF-responsive cells are not derived from relatively quiescent stem cells in vivo, but from the highly mitotic, Dlx2⁺, transit-amplifying C cells. When exposed to EGF, C cells downregulate Dlx2, arrest neuronal production, and become highly proliferative and invasive. Killing Dlx2⁺ cells dramatically reduces the in vivo response to EGF and neurosphere formation in vitro. Furthermore, purified C cells are 53-fold enriched for neurosphere generation. We conclude that transit-amplifying cells retain stem cell competence under the influence of growth factors.