The neurovascular unit (NVU) is a complex structure comprising neurons, glia, and pericytes that interact with specialized endothelial cells to maintain cerebral homeostasis and blood-brain barrier (BBB) integrity. Alterations to NVU formation and function can lead to serious forms of cerebrovascular disease, including cerebral small vessel diseases (CSVDs), a range of pathological changes of cerebral capillaries within the white matter contributing to BBB dysfunction and demyelination. Despite the growing recognition of the pivotal roles played by neuro-vascular and glia-vascular interfaces in NVU formation and functioning, CSVD research has mainly focused on characterizing pericyte and EC dysfunction, leaving our understanding of the contribution of non-vascular cells of the brain parenchyma limited. Here, we use a novel zebrafish mutant to delve into the intricate interplay among NVU components and demonstrate how the compromised specification of a progenitor cell population sets off a cascade of events, ultimately leading to severe cerebrovascular abnormalities. The mutation affects Scavenger Receptor B2 (scarb2)/Lysosomal Membrane Protein 2 (limp2), a highly conserved protein residing in the membrane of late endosomes and lysosomes. We find Scarb2 to be predominantly expressed in Radial Glia Cells (RGCs), a multipotent cell giving rise to neurons and glia in both zebrafish and mammals. Through live imaging and genetic manipulations, we identify impaired Notch3 signaling in RGCs and their glial progeny as the primary consequence of Scarb2a depletion and show that this disruption causes excessive neurogenesis at the expense of glial cell differentiation. We further pinpoint compromised acidification of the endolysosomal compartment in mutant cells as the underlying cause of disrupted Notch3 processing, linking for the first time Notch3 defects in non-vascular cells of the brain parenchyma to CSVD phenotypes. Given the evolutionary conservation of SCARB2 expression and the remarkable recapitulation of CSVD phenotypes, scarb2 mutants provide a promising framework for investigating the mechanisms governing Notch3 processing in non-vascular cells and their involvement in the onset of CSVD.