ESCs undergoing neural differentiation in vitro display an intrinsic heterogeneity with a large subset of the cells forming polarized neural rosettes that maintain the neural progenitor microenvironment. This heterogeneity is not only necessary for normal development but also causes substantial technical challenges for practical applications. Here, we report a novel regulator of early neural progenitors, the apical polarity protein Crb2 (Crumbs homologue 2). Employing monolayer differentiation of mouse ESCs to model neurogenesis in vitro, we find that Crb2 is upregulated with Sox1 and Musashi at the onset of neuroepithelial specification and localizes to the apical side of neural rosettes. Stable Crb2-knockdown (KD) lines die at the onset of neural specification and fail to stabilize several apical polarity proteins. However, these cells are able to proliferate under selfrenewing conditions and can be differentiated into mesodermal and endodermal lineages. Conversely, Crb2 overexpression during neural differentiation results in elevated levels of other apical polarity proteins and increases proliferation. Additionally, sustained overexpression of Crb2 reduces terminal differentiation into TuJ1-positive neurons. Furthermore, we demonstrate that Crb2 overexpression under selfrenewing conditions increases glycogen synthase kinase (GSK)-3b inhibition, correlating with an increase in clonogenicity. To confirm the importance of GSK-3b inhibition downstream of Crb2, we show that Crb2-KD cells can be forced into neural lineages by blocking GSK-3b function and supplementing Epidermal Growth Factor (EGF) and basic Fibroblast Growth Factor (bFGF). Thus, this is the first demonstration that a member of the Crumbs family is essential for survival and differentiation of ESC-derived neural progenitors.