Neural stem cells (NSCs) can give rise to both neurons and glia, but the regulatory mechanisms governing their differentiation transitions remain incompletely understood. Here, we address the role of cyclin-dependent kinase inhibitors (CDKIs) in the later stages of dorsal cortical development. We find that the CDKIs p18 and p27 are upregulated at the onset of astrocyte generation. Acute manipulation of p18 and p27 levels shows that CDKIs modulate lineage switching between upper-layer neurons and astrocytes at the transitional stage. We generate a conditional knock-in mouse model to induce p18 in NSCs. The transcriptomic deconvolution of microdissected tissue reveals that increased levels of p18 promote glial cell development and activate Delta-Notch signaling. Furthermore, we show that p18 upregulates the homeobox transcription factor Dlx2 to subsequently induce the differentiation of olfactory bulb interneurons while reducing the numbers of upper-layer neurons and astrocytes at the perinatal stage. Clonal analysis using transposon-based reporters reveals that the transition from the astrocyte to the interneuron lineage is potentiated by p18 at the single-cell level. In sum, our study reports a function of p18 in determining the developmental boundaries among different cellular lineages arising sequentially from NSCs in the dorsal cortex.