The study of molecular regulation in neural development provides information to understand how diverse neural cells are generated. It also helps to establish therapeutic strategies for the treatment of neural degenerative disorders and brain tumors. The Hairy/E(spl) family members are potential targets of Notch signaling, which is fundamental to neural cell maintenance, cell fate decisions, and compartment boundary formation. In this study, we isolated a zebrafish homolog of Hairy/E(spl), her2, and showed that this gene is expressed in neural progenitor cells and in the developing nervous system. The expression of her2 required Notch activation, as revealed by a Notch-defective mutant and a chemical inhibitor, N-[N-(3,5-difluorophenacetyl)-L-alanyl]-S-phenylglycine t-butyl ester (DAPT). The endogenous expression of Her2 was altered by both overexpression and morpholino-knockdown approaches, and the results demonstrated that Her2 was both necessary and sufficient to promote the proliferation of neural progenitors by inhibiting the transcription of the cell cycle inhibitors cdkn1a, cdkn1ba, and cdkn1bb. Her2 knockdown caused premature neuronal differentiation, which indicates that Her2 is essential for inhibiting neuronal differentiation. At a later stage of neural development, Her2 could induce glial differentiation. The overexpression of Her2 constructs lacking the bHLH or WRPW domain phenocopied the effect of the morpholino knockdown, demonstrating the essential function of these two domains and further confirming the knockdown specificity. In conclusion, our data reveal that Her2 promotes progenitor proliferation and maintains progenitor characteristics by inhibiting neuronal differentiation. Together, these two mechanisms ensure the proper development of the neural progenitor cell pool.