The LIM homeobox 2 transcription factor LHX2 is known to control crucial aspects of neural development in various species. However, its function in human neural development is still elusive. Here, we demonstrate that LHX2 plays a critical role in human neural differentiation using hESCs as a model for differentiation. In hESC-derived neural progenitors (hESC-NPs), expression of LHX2 was prior to PAX6 and SOX1, and LHX2 was co-expressed with early neural markers. Conditional ectopic expression of LHX2 promoted the formation of neural rosette-like structures and upregulated neural transcription factor expression. Conversely, disruption of LHX2 expression by constitutive expression of LHX2 shRNA in hESCs significantly impaired neural differentiation both in vitro and in vivo. Furthermore, we demonstrated that LHX2 regulates neural differentiation in two levels, first, it promotes the expression of neurogenic gene Pax6 and second, it promotes the expression of Cerberus 1 to inhibit non-neural differentiation. LHX2 was found to regulate PAX6 expression in hESC-NPs by binding to PAX6 enhancers, which were enriched with the chromatin markers of active enhancers H3K4me1 and H3K27ac). Importantly, LHX2 was also found to attenuate BMP and WNT signaling and inhibit non-neural differentiation by augmenting the expression of BMP and WNT antagonist, Cerberus 1(CER1). Collectively, our studies provide further insights into the molecular mechanisms governing human neural differentiation, which has implications in the large-scale generation of neural cells for basic research and clinical applications.