Zebrafish have a high capacity to replace lost neurons after brain injury. New neurons involved in repair are generated by a specific set of glial cells, known as ependymoglial cells. We analyze changes in the transcriptome of ependymoglial cells and their progeny after injury to infer the molecular pathways governing restorative neurogenesis. We identify the aryl hydrocarbon receptor (AhR) as a regulator of ependymoglia differentiation toward post-mitotic neurons. In vivo imaging shows that high AhR signaling promotes the direct conversion of a specific subset of ependymoglia into post-mitotic neurons, while low AhR signaling promotes ependymoglial proliferation. Interestingly, we observe the inactivation of AhR signaling shortly after injury followed by a return to the basal levels 7 days post injury. Interference with timely AhR regulation after injury leads to aberrant restorative neurogenesis. Taken together, we identify AhR signaling as a crucial regulator of restorative neurogenesis timing in the zebrafish brain.