Lysosomes have recently been implicated in regulation of quiescence in adult neural stem cells (NSCs). Whether lysosomes regulate the differentiation of neural stem-progenitor cells (NPCs) in the embryonic brain has remained unknown, however. We here show that lysosomes are more abundant in rapidly dividing NPCs than in differentiating neurons in the embryonic mouse neocortex and ganglionic eminence. The genes for TFEB and TFE3, master regulators of lysosomal biosynthesis, as well as other lysosome-related genes were also expressed at higher levels in NPCs than in differentiating neurons. Anatomic analysis revealed accumulation of lysosomes at the apical and basal endfeet of NPCs. Knockdown of TFEB and TFE3, or that of the lysosomal transporter Slc15a4, resulted in premature differentiation of neocortical NPCs. Conversely, forced expression of an active form of TFEB (TFEB-AA) suppressed neuronal differentiation of NPCs in association with upregulation of NPC-related genes. These results together point to a previously unappreciated role for TFEB and TFE3, and possibly for lysosomes, in maintenance of the undifferentiated state of embryonic NPCs. We further found that lysosomes are even more abundant in an NPC subpopulation that rarely divides and includes the embryonic origin of adult NSCs than in the majority of NPCs that divide frequently for construction of the embryonic brain, and that overexpression of TFEB-AA also suppressed the cell cycle of neocortical NPCs. Our results thus also implicate lysosomes in establishment of the slowly dividing, embryonic origin of adult NSCs.