In the mouse neocortex, neural progenitor cells generate both differentiating neurons and daughter cells that maintain progenitor fate. Here, we show that the TRIM-NHL protein TRIM32 regulates protein degradation and microRNA activity to control the balance between those two daughter cell types. In both horizontally and vertically dividing progenitors, TRIM32 becomes polarized in mitosis and is concentrated in one of the two daughter cells. TRIM32 overexpression induces neuronal differentiation while inhibition of TRIM32 causes both daughter cells to retain progenitor cell fate. TRIM32 ubiquitinates and degrades the transcription factor c-Myc but also binds Argonaute-1 and thereby increases the activity of specific microRNAs. We show that Let-7 is one of the TRIM32 targets and is required and sufficient for neuronal differentiation. TRIM32 is the mouse ortholog of Drosophila Brat and Mei-P26 and might be part of a protein family that regulates the balance between differentiation and proliferation in stem cell lineages.