Central nervous system (CNS) tumors account for almost a third of pediatric cancers and are the largest contributor to cancer-related death in children. Cranial radiation therapy (CRT) is, often in combination with chemotherapy and surgery, effective in the treatment of high-grade childhood brain cancers, but it has been associated with late complications in 50–90% of survivors, such as decline in cognition and mood, decreased social competence, and fatigue. A leading hypothesis to explain the decline in cognition, at least partially, is injury to the neural stem and progenitor cells (NSPCs), which leads to apoptosis and altered fate choice, favoring gliogenesis over neurogenesis. Hence, treatments harnessing neurogenesis are of great relevance in this context. Lithium, a well-known mood stabilizer, has neuroprotective and antitumor effects and has been found to reverse irradiation-induced damage in rodents, at least in part by regulating the expression of the glutamate decarboxylase 2 gene (Gad2) via promoter demethylation in rat NSPCs. Additionally, lithium was shown to rescue irradiation-induced cognitive defects in mice. Here, we show that irradiation (IR) alone or in combination with lithium chloride (LiCl) caused major changes in gene expression and global DNA methylation in iPSC-derived human NSPCs (hNSPCs) compared to untreated cells, as well as LiCl-only-treated cells. The pattern of DNA methylation changes after IR-treatment alone was stochastic and observed across many different gene groups, whereas differences in DNA methylation after LiCl-treatment of irradiated cells were more directed to specific promoters of genes, including genes associated with neurogenesis, for example GAD2. Interestingly, IR and IR + LiCl treatment affected the promoter methylation and expression of several genes encoding factors involved in BMP signaling, including the BMP antagonist gremlin1. We propose that lithium in addition to promoting neuronal differentiation, also represses glial differentiation in hNSPCs with DNA methylation regulation being a key mechanism of action.