Degeneration of CNS tissue commonly occurs during neuroinflammatory conditions, such as multiple sclerosis (MS) and neurotrauma. During such conditions, neural stem/progenitor cell (NPC) populations have been suggested to provide new cells to degenerated areas. In the normal brain, NPCs from the SVZ generate neurons that settle in the olfactory bulb or striatum. However, during neuroinflammatory conditions NPCs migrate toward the site of injury to form oligodendrocytes and astrocytes, whereas newly formed neurons are less abundant. Thus, the specific NPC lineage fate decisions appear to respond to signals from the local environment. The instructive signals from inflammation have been suggested to rely on excessive levels of the free radical nitric oxide (NO), which is an essential component of the innate immune response, as NO promotes neuronal to glial cell fate conversion of differentiating rat NPCs in vitro. Here we demonstrate that the NO-induced neuronal to glial fate conversion is dependent on the transcription factor NRSF/REST. Chromatin modification status of a number of neuronal and glial lineage restricted genes was altered upon NO-exposure. These changes coincided with gene expression alterations, demonstrating a global shift towards glial potential. Interestingly, by blocking the function of NRSF/REST, alterations in chromatin modifications were lost and the NO-induced neuronal to glial switch was suppressed. This implicates NRSF/REST as a key factor in the NPC-specific response to innate immunity and suggests a novel mechanism by which signaling from inflamed tissue promotes the formation of glial cells. Stem Cells 2014.