The mechanisms regulating the size of the cerebral cortex are poorly understood. Here, we demonstrate that the Rap1 guanine nucleotide exchange factor, C3G (Grf2, Rapgef1), controls the size of the cerebral precursor population. Mice lacking C3G show overproliferation of the cortical neuroepithelium. C3G-deficient neuroepithelial cells accumulate nuclear beta-catenin and fail to exit the cell cycle in vivo. C3G mutant neural precursor cells fail to activate Rap1, exhibit activation of Akt/PKB, inhibition of the beta-catenin-degrading enzyme, Gsk3beta and accumulation of cytosolic and nuclear beta-catenin when exposed to growth factors, in vitro. Our results show that the size of the cortical neural precursor population is controlled by C3G-mediated inhibition of the Ras signalling pathway.