During development of the central nervous system, the apical-basal polarity of neuroepithelial cells is critical for homeostasis of proliferation and differentiation of neural stem cells. While adherens junctions at the apical surface of neuroepithelial cells are important for maintaining the polarity, the molecular mechanism regulating integrity of these adherens junctions remains largely unknown. Given the importance of actin cytoskeleton in adherens junctions, we have analyzed the role of mDia, an actin nucleator and a Rho effector, in the integrity of the apical adherens junction. Here we show that mDia1 and mDia3 are expressed in the developing brain, and that mDia3 is concentrated in the apical surface of neuroepithelium. Mice deficient in both mDia1 and mDia3 develop periventricular dysplastic mass widespread throughout the developing brain, where neuroepithelial cell polarity is impaired with attenuated apical actin belts and loss of apical adherens junctions. In addition, electron microscopic analysis revealed abnormal shrinkage and apical membrane bulging of neuroepithelial cells in the remaining areas. Furthermore, perturbation of Rho, but not that of ROCK, causes loss of the apical actin belt and adherens junctions similarly to mDia-deficient mice. These results suggest that actin cytoskeleton regulated by Rho-mDia pathway is critical for the integrity of the adherens junctions and the polarity of neuroepithelial cells, and that loss of this signaling induces aberrant, ectopic proliferation and differentiation of neural stem cells.