Aims/hypothesis: Maternal diabetes induces neural tube defects during embryogenesis. Since the neural tube is derived from neural stem cells (NSCs), it is hypothesised that in diabetic pregnancy neural tube defects result from altered expression of developmental control genes, leading to abnormal proliferation and cell-fate choice of NSCs. Materials and methods: Cell viability, proliferation index and apoptosis of NSCs and differentiated cells from mice exposed to physiological or high glucose concentration medium were examined by a tetrazolium salt assay, 5-bromo-2′-deoxyuridine incorporation, terminal deoxynucleotidyl transferase-mediated dUTP nick end labelling and immunocytochemistry. Expression of developmental genes, including sonic hedgehog (Shh), bone morphogenetic protein 4 (Bmp4), neurogenin 1/2 (Neurog1/2), achaete-scute complex-like 1 (Ascl1), oligodendrocyte transcription factor 1 (Olig1), oligodendrocyte lineage transcription factor 2 (Olig2), hairy and enhancer of split 1/5 (Hes1/5) and delta-like 1 (Dll1), was analysed by real-time RT-PCR. Proliferation index and neuronal specification in the forebrain of embryos at embryonic day 11.5 were examined histologically. Results: High glucose decreased the proliferation of NSCs and differentiated cells. The incidence of apoptosis was increased in NSCs treated with high glucose, but not in the differentiated cells. High glucose also accelerated neuronal and glial differentiation from NSCs. The decreased proliferation index and early differentiation of neurons were evident in the telencephalon of embryos derived from diabetic mice. Exposure to high glucose altered the mRNA expression levels of Shh, Bmp4, Neurog1/2, Ascl1, Hes1, Dll1 and Olig1 in NSCs and Shh, Dll1, Neurog1/2 and Hes5 in differentiated cells. Conclusions/interpretation: The changes in proliferation and differentiation of NSCs exposed to high glucose are associated with altered expression of genes that are involved in cell-cycle progression and cell-fate specification during neurulation. These changes may form the basis for the defective neural tube patterning observed in embryos of diabetic pregnancies.