In the developing CNS alpha- and beta-dystroglycan are highly concentrated in the endfeet of radial neuroepithelial cells at the contact site to the basal lamina. We show that injection of anti-dystroglycan Fab fragments, knockdown of dystroglycan using RNAi, and overexpression of a dominant-negative dystroglycan protein by microelectroporation in neuroepithelial cells of the chick retina and optic tectum in vivo leads to the loss of their radial morphology, to hyperproliferation, to an increased number of postmitotic neurons, and to an altered distribution of several basally concentrated proteins. Moreover, these treatments also altered the oriented growth of axons from retinal ganglion cells and from tectal projection neurons. In contrast, expression of non-cleavable dystroglycan protein in neuroepithelial cells reduced their proliferation and their differentiation to postmitotic neurons. These results demonstrate that dystroglycan plays a key role in maintaining neuroepithelial cell morphology, and that interfering with dystroglycan function influences proliferation and differentiation of neuroepithelial cells. These data also suggest that an impaired dystroglycan function in neuroepithelial cells might be responsible for some of the severe brain abnormalities observed in certain forms of congenital muscular dystrophy.