Thyroid hormone is critical for normal brain development and acts in a spatial and temporal specific pattern. Thyroid hormone excess, or deficiency, can lead to irreversible impairment of brain and sensory development. Chicken ovalbumin upstream-transcription factor 1 (COUP-TF1), expressed early in neuronal development, is essential to achieve normal brain structure. Thyroid hormone stimulation of gene expression is inversely correlated with the level of COUP-TF1 expression. An in vitro method of differentiating mouse embryonic stem (mES) cells into cortical neurons was utilized to study the influence of COUP-TF1 on thyroid hormone signaling in brain development. mES cells were cultured and differentiated in specific conditioned media, and a high percentage of nestin-positive progenitor neurons in the first stage, and cortical neurons in the second stage, was obtained with characteristic neuronal firing. The number of nestin-positive progenitors, as determined by fluorescence-activated cell sorting analysis, was significantly greater with triiodothyronine (T3) treatment compared to control (p < 0.05). T3 enhanced the expression of cortical neuron marker (Tbr1 and Rc3) mRNAs. After COUP-TF1 knockdown, the number of nestin-positive progenitors was reduced compared to control (p < 0.05), but the number increased with T3 treatment. The mRNA of cortical neuronal gene markers was measured after COUP-TF1 knockdown. In the presence of T3, the peak expression of neuron markers Emx1, Tbr1, Camkiv, and Rc3 mRNA was earlier, at day 18 of differentiation, compared to control cells, at day 22. Furthermore, after COUP-TF1 knockdown, T3 induction of Rc3 and Tbr1 mRNA was significantly enhanced compared to cells expressing COUP-TF1. These results indicate that COUP-TF1 plays an important role in modulating the timing and magnitude of T3-stimulated gene expression required for normal corticogenesis.