In both pediatric and adult patients, cranial radiation therapy causes a debilitating cognitive decline that is poorly understood and currently untreatable. This decline is characterized by hippocampal dysfunction, and seems to involve a radiation-induced decrease in postnatal hippocampal neurogenesis. Here we show that the deficit in neurogenesis reflects alterations in the microenvironment that regulates progenitor-cell fate, as well as a defect in the proliferative capacity of the neural progenitor-cell population. Not only is hippocampal neurogenesis ablated, but the remaining neural precursors adopt glial fates and transplants of non-irradiated neural precursor cells fail to differentiate into neurons in the irradiated hippocampus. The inhibition of neurogenesis is accompanied by marked alterations in the neurogenic microenvironment, including disruption of the microvascular angiogenesis associated with adult neurogenesis and a marked increase in the number and activation status of microglia within the neurogenic zone. These findings provide clear targets for future therapeutic interventions.