Abstract Introduction Pluripotent stem cells are increasingly used to build therapeutic models, including the transplantation of neural progenitors derived from human embryonic stem cells (hESCs). Recently, long non-coding RNAs (lncRNAs), including delta-like homolog 1 gene and the type III iodothyronine deiodinase gene ( DLK1-DIO3 ) imprinted locus-derived maternally expressed gene 3 ( MEG3 ), were found to be expressed during neural development. The deregulation of these lncRNAs is associated with various neurological diseases. The imprinted locus DLK1-DIO3 encodes abundant non-coding RNAs (ncRNAs) that are regulated by differential methylation of the locus. We aim to study the correlation between the DLK1-DIO3 -derived ncRNAs and the capacity of hESCs to differentiate into neural lineages. Methods We classified hESC sublines into MEG3 -ON and MEG3 -OFF based on the expression levels of MEG3 and its downstream microRNAs as detected by quantitative reverse transcription-polymerase chain reaction (qRT-PCR). A cDNA microarray was used to analyze the gene expression profiles of hESCs. To investigate the capacity of neural differentiation in MEG3 -ON and MEG3 -OFF hESCs, we performed neural lineage differentiation followed by neural lineage marker expression and neurite formation analyses via qRT-PCR and immunocytochemistry, respectively. MEG3 -knockdown via small interfering RNA (siRNA) and small hairpin RNA (shRNA) was used to investigate the potential causative effect of MEG3 in regulating neural lineage-related gene expression. Results DLK1-DIO3 -derived ncRNAs were repressed in MEG3 -OFF hESCs compared with those in the MEG3 -ON hESCs. The transcriptome profile indicated that many genes related to nervous system development and neural-type tumors were differentially expressed in MEG3 -OFF hESCs. Three independent MEG3 -knockdown assays using different siRNA and shRNA constructs consistently resulted in downregulation of some neural lineage genes. Lower expression levels of stage-specific neural lineage markers and reduced neurite formation were observed in neural lineage-like cells derived from MEG3 -OFF-associated hESCs compared with those in the MEG3 -ON groups at the same time points after differentiation. Conclusions Repression of ncRNAs derived from the DLK1-DIO3 imprinted locus is associated with reduced neural lineage differentiation potential in hESCs.