Both Down syndrome (DS) individuals and animal models exhibit hypo-cellularity in hippocampus and neocortex indicated by enhanced neuronal death and compromised neurogenesis. Ubiquitin-specific peptidase 25 (USP25), a human chromosome 21 (HSA21) gene, encodes for a deubiquitinating enzyme overexpressed in DS patients. Dysregulation of USP25 has been associated with Alzheimer's phenotypes in DS, but its role in defective neurogenesis in DS has not been defined. In this study, we found that USP25 upregulation impaired cell cycle regulation during embryonic neurogenesis and cortical development. Overexpression of USP25 in hippocampus promoted the neural stem cells to glial cell fates and suppressed neuronal cell fate by altering the balance between cyclin D1 and cyclin D2, thus reducing neurogenesis in the hippocampus. USP25-Tg mice showed increased anxiety/depression-like behaviors and learning and memory deficits. These results suggested that USP25 overexpression resulted in defective neurogenesis and cognitive impairments, which could contribute to the pathogenesis of DS. USP25 may be a potential pharmaceutical target for DS.