Adult hippocampal neurogenesis is regulated by activity. But how do neural precursor cells in the hippocampus respond to surrounding network activity and translate increased neural activity into a developmental program? Here we show that long-term potentiation (LTP)-like synaptic activity within a cellular network of mature hippocampal neurons promotes neuronal differentiation of newly generated cells. In co-cultures of precursor cells with primary hippocampal neurons, LTP-like synaptic plasticity induced by addition of glycine in Mg²⁺-free media for 5 min, produced synchronous network activity and subsequently increased synaptic strength between neurons. Furthermore, this synchronous network activity led to a significant increase in neuronal differentiation from the co-cultured neural precursor cells. When applied directly to precursor cells, glycine- and Mg²⁺-free solution did not induce neuronal differentiation. Synaptic plasticity-induced neuronal differentiation of precursor cells was observed in the presence of GABAergic neurotransmission blockers but was dependent on NMDA-mediated Ca²⁺ influx. Most importantly, neuronal differentiation required the release of brain-derived neurotrophic factor (BDNF) from the underlying substrate hippocampal neurons as well as TrkB receptor phosphorylation in precursor cells. This suggests that activity-dependent stem cell differentiation within the hippocampal network is mediated via synaptically evoked BDNF signaling.