The control of self-renewal and differentiation of neural stem and progenitor cells is a crucial issue in stem cell and cancer biology. Drosophila type II neuroblast lineages are prone to developing impaired neuroblast homeostasis if the limited self-renewing potential of intermediate neural progenitors (INPs) is unrestrained. Here, we demonstrate that Drosophila SWI/SNF chromatin remodeling Brahma (Brm) complex functions cooperatively with another chromatin remodeling factor, Histone deacetylase 3 (HDAC3) to suppress the formation of ectopic type II neuroblasts. We show that multiple components of the Brm complex and HDAC3 physically associate with Earmuff (Erm), a type II-specific transcription factor that prevents dedifferentiation of INPs into neuroblasts. Consistently, the predicted Erm-binding motif is present in most of known binding loci of Brm. Furthermore, brm and hdac3 genetically interact with erm to prevent type II neuroblast overgrowth. Thus, the Brm-HDAC3-Erm repressor complex suppresses dedifferentiation of INPs back into type II neuroblasts. DOI: http://dx.doi.org/10.7554/eLife.01906.001