Embryonic neural stem cells (NSCs), comprising neuroepithelial and radial glial cells, are indispensable precursors of neurons and glia in the mammalian developing brain. Since the process of neurogenesis occurs in a hypoxic environment, the question arises of how NSCs deal with low oxygen tension and whether it affects their stemness. Genes from the hypoxia-inducible factors (HIF) family are well known factors governing cellular response to hypoxic conditions. In this study, we have discovered that the endogenous stabilization of hypoxia-inducible factor 1Alpha (Hif1 Alpha) during neural induction is critical for the normal development of the NSCs pool by preventing its premature depletion and differentiation. The knock-out of the Hif1 Alpha gene in mESC-derived neurospheres led to a decrease in self-renewal of NSCs, paralleled by an increase in neuronal differentiation. Similarly, neuroepithelial cells differentiated in hypoxia exhibited accelerated neurogenesis soon after Hif1 Alpha knock-down. In both models, the loss of Hif1 Alpha was accompanied by an immediate drop in neural repressor Hes1 levels while changes in Notch signaling were not observed. We found that active Hif1 Alpha/Arnt1 transcription complex bound to the evolutionarily conserved site in Hes1 gene promoter in both neuroepithelial cells and neural tissue of E8.5 – 9.5 embryos. Taken together, these results emphasize the novel role of Hif1 Alpha in the regulation of early NSCs population through the activation of neural repressor Hes1, independently of Notch signaling.