The tumor suppressor adenomatous polyposis coli (APC) is a multifunctional protein that not only inhibits the Wnt signaling pathway by promoting the degradation of β-catenin but also controls cell polarity, motility, and division. APC is abundantly expressed in the adult central nervous system, but its role in adult neurogenesis remains unknown. Using conditional deletion (or knockout) of APC (APC-CKO) from glial fibrillary acidic protein (GFAP)-expressing cells including adult neural stem cells (NSCs) in the subventricular zone and hippocampal dentate gyrus, we show that APC expression by these cells is a critical component of adult neurogenesis. Loss of APC function resulted in a marked reduction of GFAP-expressing NSC-derived new neurons, leading to the decreased volume of olfactory granule cell layer. Two distinct mechanisms account for impaired neurogenesis in APC-CKO mice. First, APC was highly expressed in migrating neuroblasts and APC deletion disturbed the differentiation from Mash1-expressing transient amplifying cells to neuroblasts with concomitant accumulation of β-catenin. As a result, migrating neuroblasts decreased, whereas Mash1-expressing dividing cells reciprocally increased in the olfactory bulb of APC-CKO mice. Second, APC deletion promoted an exhaustion of the adult germinal zone. Functional NSCs and their progeny progressively depleted with age. These findings demonstrate that APC expression plays a key role in regulating intracellular β-catenin level and neuronal differentiation of newly generated cells, as well as maintaining NSCs in the adult neurogenic niche. STEM CELLS 2010;28:2053-2064.