The lateral ventricle (LV) is flanked by the subventricular zone (SVZ), a neural stem cell (NSC) niche rich in extrinsic growth factors regulating NSC maintenance, proliferation, and neuronal differentiation. Dysregulation of the SVZ niche causes LV expansion, a condition known as hydrocephalus; however, the underlying pathological mechanisms are unclear. We show that deficiency of the proteoglycan Tsukushi (TSK) in ependymal cells at the LV surface and in the cerebrospinal fluid results in hydrocephalus with neurodevelopmental disorder-like symptoms in mice. These symptoms are accompanied by altered differentiation and survival of the NSC lineage, disrupted ependymal structure, and dysregulated Wnt signaling. Multiple TSK variants found in patients with hydrocephalus exhibit reduced physiological activity in mice in vivo and in vitro. Administration of wild-type TSK protein or Wnt antagonists, but not of hydrocephalus-related TSK variants, in the LV of TSK knockout mice prevented hydrocephalus and preserved SVZ neurogenesis. These observations suggest that TSK plays a crucial role as a niche molecule modulating the fate of SVZ NSCs and point to TSK as a candidate for the diagnosis and therapy of hydrocephalus.