Maternal use of cocaine during pregnancy is associated with sustained morphological brain abnormalities and sustained cognitive deficits in the offspring. Here, we use a cell culture model of highly enriched human fetal brain-derived neural precursor cells (NPCs) to assess the effects of cocaine treatment on their proliferation, migration, and differentiation. Our data show that cocaine treatment markedly inhibited the proliferation of NPCs, a phenomenon that was associated with cell cycle arrest, possibly because of increased expression of the cyclin-dependent kinase inhibitor p21. In addition, treatment of NPCs with cocaine inhibited their migratory response to CXCL12 (stromal cell-derived factor-1alpha), a finding that correlated with cocaine-induced down-regulation of CXCR4 on NPCs. Finally, these data demonstrated that NPCs exposed to cocaine underwent differentiation into cells expressing neuronal markers that was associated with an inhibition of SOX2 (SRY-related HMG-box gene 2), a transcription factor that inhibits NPC differentiation. Taken together, these results point to several cellular mechanisms whereby exposure of human neural stem cells to cocaine in utero could contribute to subsequent neurodevelopmental and neurocognitive deficits.