Neural stem cells (NSCs) have the ability to proliferate and differentiate into neurons and glia. Regulation of NSC fate by small molecules is important for the generation of a certain type of cell. The identification of small molecules that can induce new neurons from NSCs could facilitate regenerative medicine and drug development for neurodegenerative diseases. In this study, we screened natural compounds to identify molecules that are effective on NSC cell fate determination. We found that Kuwanon V (KWV), which was isolated from the mulberry tree (Morus bombycis) root, increased neurogenesis in rat NSCs. In addition, during NSC differentiation, KWV increased cell survival and inhibited cell proliferation as shown by 5-bromo-2-deoxyuridine pulse experiments, Ki67 immunostaining and neurosphere forming assays. Interestingly, KWV enhanced neuronal differentiation and decreased NSC proliferation even in the presence of mitogens such as epidermal growth factor and fibroblast growth factor 2. KWV treatment of NSCs reduced the phosphorylation of extracellular signal-regulated kinase 1/2, increased mRNA expression levels of the cyclin-dependent kinase inhibitor p21, down-regulated Notch/Hairy expression levels and up-regulated microRNA miR-9, miR-29a and miR-181a. Taken together, our data suggest that KWV modulates NSC fate to induce neurogenesis, and it may be considered as a new drug candidate that can regenerate or protect neurons in neurodegenerative diseases.