Polycomb group protein Ezh2 is a histone H3 Lys-27 histone methyltransferase orchestrating an extensive epigenetic regulatory program. Several nervous system-specific genes are known to be repressed by Ezh2 in stem cells and derepressed during neuronal differentiation. However, the molecular mechanisms underlying this regulation remain poorly understood. Here we show that Ezh2 levels are dampened during neuronal differentiation by brain-enriched microRNA miR-124. Expression of miR-124 in a neuroblastoma cells line was sufficient to up-regulate a significant fraction of nervous system-specific Ezh2 target genes. On the other hand, naturally elevated expression of miR-124 in embryonic carcinoma cells undergoing neuronal differentiation correlated with down-regulation of Ezh2 levels. Importantly, overexpression of Ezh2 mRNA with a 3′-untranslated region (3′-UTR) lacking a functional miR-124 binding site, but not with the wild-type Ezh2 3′-UTR, hampered neuronal and promoted astrocyte-specific differentiation in P19 and embryonic mouse neural stem cells. Overall, our results uncover a molecular mechanism that allows miR-124 to balance the choice between alternative differentiation possibilities through fine-tuning the expression of a critical epigenetic regulator.