Haploinsufficiency of CHD7 (Chromo-Helicase-DNA binding protein 7) causes a severe congenital disease CHARGE syndrome. Brain anomaly such as microcephaly and olfactory bulb agenesis seen in CHARGE patients have not been mimicked in previous animal models. Here, we uncover an indispensable function of CHD7 in the neuroepithelium (NE) but not in the neural stem cells (NSCs) after NE transition. Loss of Chd7 in mouse NE resulted in CHARGE-like brain anomalies due to reduced proliferation and differentiation of neural stem and progenitor cells, which were recapitulated in CHD7 KO human forebrain organoids. Mechanistically, we find that CHD7 activates neural transcription factors by removing the repressive histone mark H3K27me3 and promoting chromatin accessibility. Importantly, neurodevelopmental defects caused by CHD7 loss in human brain organoids and mice were ameliorated by the inhibition of H3K27me3 methyltransferase EZH2. Altogether, by implementing appropriate experimental models, we uncover the pathogenesis of CHD7-associated neurodevelopmental diseases, and identify a potential therapeutic opportunity for CHARGE syndrome.