Insulin is one of the standard components used to culture primary neurospheres. Although it stimulates growth of different types of cells, the effects of insulin on adult neural stem cells (NSCs) have not been well characterized. Here, we reveal that insulin stimulates proliferation, but not survival or self-renewal, of adult NSCs. This effect is mediated by insulin receptor substrate 2 (IRS2) and subsequent activation of the protein kinase B (or Akt), leading to increased activity of the G1-phase cyclin-dependent kinase 4 (Cdk4) and cell cycle progression. Neurospheres isolated from Irs2-deficient mice are reduced in size and fail to expand in culture and this impaired proliferation is rescued by introduction of a constitutively active Cdk4 (Cdk4^R24C/R24C). More interestingly, activation of the IRS2/Akt/Cdk4 signaling pathway by insulin is also necessary for the generation in vitro of neurons and oligodendrocytes from NSCs. Furthermore, the IRS2/Cdk4 pathway is also required for neuritogenesis, an aspect of neuronal maturation that has not been previously linked to regulation of the cell cycle. Differentiation of NSCs usually follows exit from the cell cycle due to increased levels of CDK-inhibitors which prevent activation of CDKs. In contrast, our data indicate that IRS2-mediated Cdk4 activity in response to a mitogen such as insulin promotes terminal differentiation of adult NSCs.