Although many long non-coding RNAs (lncRNAs) are imprinted, their roles often remain unknown. The Dlk1-Dio3 domain expresses the lncRNA Meg3 and multiple microRNAs and small nucleolar RNAs (snoRNAs) on the maternal chromosome and constitutes an epigenetic model for development. The domain's Dlk1 (Delta-like-1) gene encodes a ligand that inhibits Notch1 signaling and regulates diverse developmental processes. Using a hybrid embryonic stem cell (ESC) system, we find that Dlk1 becomes imprinted during neural differentiation and that this involves transcriptional upregulation on the paternal chromosome. The maternal Dlk1 gene remains poised. Its protection against activation is controlled in cis by Meg3 expression and also requires the H3-Lys-27 methyltransferase Ezh2. Maternal Meg3 expression additionally protects against de novo DNA methylation at its promoter. We find that Meg3 lncRNA is partially retained in cis and overlaps the maternal Dlk1 in embryonic cells. Combined, our data evoke an imprinting model in which allelic lncRNA expression prevents gene activation in cis.