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 human embryonic stem cells (hESCs) as a model. In hESC-derived neural progenitors (hESC-NPs), LHX2 was found to be expressed before PAX6, and co-expressed with early neural markers. Conditional ectopic expression of LHX2 promoted neural differentiation, whereas disruption of LHX2 expression in hESCs significantly impaired neural differentiation. Furthermore, we have demonstrated that LHX2 regulates neural differentiation at two levels: first, it promotes expression of PAX6 by binding to its active enhancers, and second, it attenuates BMP and WNT signaling by promoting expression of the BMP and WNT antagonist Cerberus 1 gene (CER1), to inhibit non-neural differentiation. These findings indicate that LHX2 regulates the transcription of downstream intrinsic and extrinsic molecules that are essential for early neural differentiation in human.