Capicua (Cic) is a transcriptional repressor mutated in the brain cancer oligodendroglioma. Despite its cancer link, little is known of Cic’s function in the brain. We show that nuclear Cic expression is strongest in astrocytes and neurons but weaker in stem cells and oligodendroglial lineage cells. Using a new conditional Cic knockout mouse, we demonstrate that forebrain-specific Cic deletion increases proliferation and self-renewal of neural stem cells. Furthermore, Cic loss biases neural stem cells toward glial lineage selection, expanding the pool of oligodendrocyte precursor cells (OPCs). These proliferation and lineage effects are dependent on de-repression of Ets transcription factors. In patient-derived oligodendroglioma cells, CIC re-expression or ETV5 blockade decreases lineage bias, proliferation, self-renewal, and tumorigenicity. Our results identify Cic as an important regulator of cell fate in neurodevelopment and oligodendroglioma, and suggest that its loss contributes to oligodendroglioma by promoting proliferation and an OPC-like identity via Ets overactivity.