Natural medicinal materials are a significant resource for the identification of compounds with specific biological properties. In this study, we employed multipotent C17.2 neural stem cells as a model for screening natural compounds that possess neural differentiation-inducing properties. We show here for the first time that, out of the 67 compounds tested, the flavonoid baicalin is a potent differentiation-inducing agent. Baicalin increased the number of cells bearing extended neurites and the expression levels of a number of neuronal markers. Importantly, baicalin promoted the expression of several key neurogenic transcriptional factors. Moreover, we demonstrated that baicalin enhanced the phosphorylation/activation of Erk1/2. Inhibition of Erk1/2 activation by the MEK inhibitor U0126 attenuated the neuronal differentiation-inducing effect of baicalin. Taken together, our findings suggest that baicalin induces neuronal differentiation of C17.2 neural stem cells and that this is mediated by activation of Erk1/2. Our work lays the foundation for exploring baicalin for the promotion of neural regeneration after injury or disease.