There is increasing appreciation for the neurodevelopmental underpinnings of many psychiatric disorders. Disorders that begin in childhood such as autism, language disorders or mental retardation as well as adult-onset mental disorders may have origins early in neurodevelopment. Neural stem cells (NSCs) can be defined as self-renewing, multipotent cells that are present in both the embryonic and adult brain. Several recent research findings demonstrate that psychiatric illness may begin with abnormal specification, growth, expansion and differentiation of embryonic NSCs. For example, candidate susceptibility genes for schizophrenia, autism and major depression include the signaling molecule Disrupted In Schizophrenia-1 (DISC-1), the homeodomain gene engrailed-2 (EN-2), and several receptor tyrosine kinases, including brain-derived growth factor and fibroblast growth factors, all of which have been shown to play important roles in NSCs or neuronal precursors. We will discuss here stem cell biology, signaling factors that affect these cells, and the potential contribution of these processes to the etiology of neuropsychiatric disorders. Hypotheses about how some of these factors relate to psychiatric disorders will be reviewed.