Neural stem cells, the source of newborn neurons in the adult hippocampus, are intimately involved in learning and memory, mood, and stress response. Despite considerable progress in understanding the biology of neural stem cells and neurogenesis, regulating the neural stem cell population precisely has remained elusive because we have lacked the specific targets to stimulate their proliferation and neurogenesis. The orphan nuclear receptor TLX/NR2E1 governs neural stem and progenitor cell self-renewal and proliferation, but the precise mechanism by which it accomplishes this is not well understood because its endogenous ligand is not known. Here, we identify oleic acid (18:1ω9 monounsaturated fatty acid) as such a ligand. We first show that oleic acid is critical for neural stem cell survival. Next, we demonstrate that it binds to TLX to convert it from a transcriptional repressor to a transcriptional activator of cell-cycle and neurogenesis genes, which in turn increases neural stem cell mitotic activity and drives hippocampal neurogenesis in mice. Interestingly, oleic acid-activated TLX strongly up-regulates cell cycle genes while only modestly up-regulating neurogenic genes. We propose a model in which sufficient quantities of this endogenous ligand must bind to TLX to trigger the switch to proliferation and drive the progeny toward neuronal lineage. Oleic acid thus serves as a metabolic regulator of TLX activity that can be used to selectively target neural stem cells, paving the way for future therapeutic manipulations to counteract pathogenic impairments of neurogenesis.