Sex-determining region Y box 2 (Sox2) is a critical transcription factor for embryogenesis and neural stem and progenitor cell (NSPC) maintenance. While distal enhancers control Sox2 in embryonic stem cells (ESCs), enhancers closer to the gene are implicated in Sox2 transcriptional regulation in neural development. We hypothesize that a downstream enhancer cluster, termed Sox2 regulatory regions 2-18 (SRR2-18), regulates Sox2 transcription in neural stem cells and we investigate this in NSPCs derived from mouse ESCs. Using functional genomics and CRISPR-Cas9-mediated deletion analyses, we investigate the role of SRR2-18 in Sox2 regulation during neural differentiation. Transcriptome analyses demonstrate that the loss of even 1 copy of SRR2-18 disrupts the region-specific identity of NSPCs, reducing the expression of genes associated with more anterior regions of the embryonic nervous system. Homozygous deletion of this Sox2 neural enhancer cluster causes reduced SOX2 protein, less frequent interaction with transcriptional machinery, and leads to perturbed chromatin accessibility genome-wide further affecting the expression of neurodevelopmental and anterior-posterior regionalization genes. Furthermore, homozygous NSPC deletants exhibit self-renewal defects and impaired differentiation into cell types found in the brain. Altogether, our data define a cis-regulatory enhancer cluster controlling Sox2 transcription in NSPCs and highlight the sensitivity of neural differentiation processes to decreased Sox2 transcription, which causes differentiation into posterior neural fates, specifically the caudal neural tube. This study highlights the importance of precise Sox2 regulation by SRR2-18 in neural differentiation.