The generation of astrocytes during the development of the mammalian spinal cord is poorly understood. Here, we demonstrate for the first time that the extracellular matrix glycoprotein tenascin C regulates the expression of key patterning genes during late embryonic spinal cord development, leading to a timely maturation of gliogenic neural precursor cells. We first show that tenascin C is expressed by gliogenic neural precursor cells during late embryonic development. The loss of tenascin C leads to a sustained generation and delayed migration of Fgfr3-expressing immature astrocytes in vivo. Consistent with an increased generation of astroglial cells, we documented an increased number of GFAP-positive astrocytes at later stages. Mechanistically, we could demonstrate an upregulation and domain shift of the patterning genes Nkx6.1 and Nkx2.2 in vivo. In addition, sulfatase 1, a known downstream target of Nkx2.2 in the ventral spinal cord, was also upregulated. Sulfatase 1 regulates growth factor signalling by cleaving sulphate residues from heparan sulphate proteoglycans. Consistent with this function, we observed changes in both FGF2 and EGF responsiveness of spinal cord neural precursor cells. Taken together, our data implicate Tnc in the regulation of proliferation and lineage progression of astroglial progenitors in specific domains of the developing spinal cord.