During midgestation, mammalian neural precursor cells (NPCs) differentiate only into neurons. Generation of astrocytes is prevented at this stage, because astrocyte-specific gene promoters are methylated. How the subsequent switch from suppression to expression of astrocytic genes occurs is unknown. We show in this study that Notch ligands are expressed on committed neuronal precursors and young neurons in mid-gestational telencephalon, and that neighboring Notch-activated NPCs acquire the potential to become astrocytes. Activation of the Notch signaling pathway in midgestational NPCs induces expression of the transcription factor nuclear factor I, which binds to astrocytic gene promoters, resulting in demethylation of astrocyte-specific genes. These findings provide a mechanistic explanation for why neurons come first: committed neuronal precursors and young neurons potentiate remaining NPCs to differentiate into the next cell lineage, astrocytes.