Basal (intermediate) progenitors are the major source of neurons in the mammalian neocortex. The molecular machinery governing basal progenitor biogenesis is unknown. Here, we show that the zinc-finger transcription factor Insm1 (insulinoma-associated 1) is expressed specifically in progenitors undergoing neurogenic divisions, has a panneurogenic role throughout the brain, and promotes basal progenitor formation in the neocortex. Mouse embryos lacking Insm1 contained half the number of basal progenitors and showed a marked reduction in cortical plate radial thickness. Forced premature expression of Insm1 in neuroepithelial cells resulted in their mitosis occurring at the basal (rather than apical) side of the ventricular zone and induced expression of the basal progenitor marker Tbr2. Remarkably, these cells remained negative for Tis21, a marker of neurogenic progenitors, and did not generate neurons but underwent self-amplification. Our data imply that Insm1 is involved in the generation and expansion of basal progenitors, a hallmark of neocortex evolution.