CDO is a cell surface immunoglobulin superfamily member that positively regulates myogenic differentiation in vitro and in vivo and signals to posttranslationally activate myogenic basic helix-loop-helix (bHLH) transcription factors. The Cdo gene is also expressed in the dorsal aspect and midline structures of the developing central nervous system, and mice lacking CDO on the C57BL/6 background display holoprosencephaly with ϳ80% penetrance, resulting in perinatal lethality. We report here that a fraction of Cdo ؊/؊ mice from this background have additional defects in brain development, including hydrocephalus and cortical thinning. Primary neural progenitor cultures from E14.5 Cdo ؊/؊ mutants display reduced proliferation, which may underlie the thinning. The cortical preplate and cortices of mutant animals also show reduced staining for -tubulin III, indicating defective neuronal differentiation. CDO levels are strongly increased in cultured C17.2 neuronal precursor cells stimulated to differentiate; modulation of CDO levels in these cells by overexpression or interfering RNA approaches enhances or diminishes differentiation, respectively. Cotransfection of CDO enhances the activity of the neurogenic bHLH factor, neurogenin1, in reporter assays and enhances heterodimerization of neurogenin1 and E47. These results indicate that CDO promotes neuronal differentiation and support the hypothesis that CDO coordinates differentiation of multiple cell lineages by regulating the activity of tissue-specific bHLH factors.The cerebral cortex originates from a sheet of neuroepithelial cells within the ventricular zone (VZ) of the dorsal telencephalon. In the mouse cerebral cortex, neurogenesis starts at embryonic day 11 (E11) and continues until E17. The balance between proliferation and differentiation of neural progenitor cells within the VZ is essential in determining the total number of neurons that comprise the neocortex (3,8,29,38,44,45). Neurogenesis is mediated by neural basic helix-loop-helix (bHLH) transcription factors, including neurogenin1 (Ngn1) and Ngn2, Mash1, and NeuroD (4,7,27,40). Neural bHLH factors are transcriptional activators that bind DNA as heterodimeric complexes with E proteins. Ngn1 and Ngn2 are selectively expressed in the VZ by dorsal telencephalic progenitors, where such cells begin differentiation, but not in the cortical plate, where fully differentiated neurons are situated (20,28,43). The transition from proliferation to differentiation during neurogenesis involves an increase in expression and activities of proneural bHLHs. However, the mechanisms that underlie this transition are not well understood.CDO is a surface protein of the immunoglobulin (Ig) superfamily that is expressed at high levels in developing muscle, the central nervous system, and the midface (24, 32). Extensive studies on myogenesis suggest that CDO serves as a component of a receptor complex that includes cadherins and the related Ig proteins, BOC and neogenin (21,(23)(24)(25). CDO positively regulates differentiati...