Although it is known that prenatal maternal stress (PNMS) has negative influence on nervous system development in offspring, there has been no solid evidence showing the effect of PNMS on early neurogenesis during development. In this study, we established a chick embryo model to investigate how PNMS affects early neurogenesis by mimicking an intrauterine environment with high dexamethasone (Dex) levels. The results showed that Dex-mimicked PNMS significantly suppressed the development of gastrula embryos and increased the risks of neural tube defects and cranial deformity. Using immunofluorescence staining and Western blots to determine the expression levels of pHIS3, PCNA/Sox2, we found that PNMS significantly inhibited the proliferation of neural progenitor cells, and the downregulation of TGFβ signaling pathway might be responsible for the inhibition. Furthermore, immunofluorescence staining and Western blots manifested that PNMS could suppress the differentiation of neural progenitor cells to neuronal lineages, but promote them to transform into neuroglial cells, which might be due to the restriction of expressions of key genes (BMP4, SHH, Wnt3a, Slug, and Msx1) related to neural differentiation. In summary, our data reveal that PNMS dramatically impacts the earliest stages of neural development, thereby greatly increasing the risk of physical and mental health problems in childhood or adulthood.