Cytokines that signal through the LIFRbeta/gp130 receptor complex, including LIF and CNTF, promote the self-renewal of embryonic and adult neural precursor cells (NPCs). In non-CNS tissues, the protein suppressor of cytokine signaling-3 (SOCS3) negatively regulates signaling through gp130. Here, we analyze the role of SOCS3 in inhibiting LIF signaling in NPCs in vitro. SOCS3 is rapidly expressed by NPCs in response to LIF stimulation, with this expression largely dependent on recruitment of STAT proteins to the activated gp130 receptor. Proliferating NPC cultures can be generated from SOCS3 knockout (SOCS3KO/KO) embryos and display prolonged STAT3 phosphorylation and induction of the GFAP gene in response to LIF. In comparison with SOCS3 wild-type (SOCS3WT/WT) NPCs, SOCS3KO/KO cultures display enhanced self-renewal capacity. However, the clonal potential of SOCS3WT/WT but not SOCS3KO/KO NPCs is enhanced by exogenous LIF. Thus, SOCS3 acts as a negative regulator of LIF signaling in NPCs.