YAP (yes-associated protein), a key transcriptional co-factor that is negatively regulated by the Hippo pathway, is crucial for the development and size control of multiple organs, including the liver. However, its role in the brain remains unclear. Here, we provide evidence for YAP regulation of mouse neocortical astrocytic differentiation and proliferation. YAP was undetectable in neurons, but selectively expressed in neural stem cells (NSCs) and astrocytes. YAP in NSCs was required for neocortical astrocytic differentiation, with no apparent role in self-renewal or neural differentiation. However, YAP in astrocytes was necessary for astrocytic proliferation. Yap (Yap1) knockout, Yap nestin conditional knockout and Yap GFAP conditional knockout mice displayed fewer neocortical astrocytes and impaired astrocytic proliferation and, consequently, death of neocortical neurons. Mechanistically, YAP was activated by BMP2, and the active/nuclear YAP was crucial for BMP2 induction and stabilization of SMAD1 and astrocytic differentiation. Expression of SMAD1 in YAP-deficient NSCs partially rescued the astrocytic differentiation deficit in response to BMP2. Taken together, these results identify a novel function of YAP in neocortical astrocytic differentiation and proliferation, and reveal a BMP2-YAP-SMAD1 pathway underlying astrocytic differentiation in the developing mouse neocortex.