Nucleostemin (NS), a member of a family of nucleolar GTP-binding proteins, is highly expressed in proliferating cells such as stem and cancer cells and is involved in the control of cell cycle progression. Both depletion and overexpression of NS result in stabilization of the tumor suppressor p53 protein in vitro. Although it has been previously suggested that NS has p53-independent functions, these to date remain unknown. Here, we report two zebrafish mutants recovered from forward and reverse genetic screens that carry loss of function mutations in two members of this nucleolar protein family, Guanine nucleotide binding-protein-like 2 (Gnl2) and Gnl3/NS. We demonstrate that these proteins are required for correct timing of cell cycle exit and subsequent neural differentiation in the brain and retina. Concomitantly, we observe aberrant expression of the cell cycle regulators cyclinD1 and p57kip2. Our models demonstrate that the loss of Gnl2 or NS induces p53 stabilization and p53-mediated apoptosis. However, the retinal differentiation defects are independent of p53 activation. Furthermore, this work demonstrates that Gnl2 and NS have both non-cell autonomously and cell-autonomous function in correct timing of cell cycle exit and neural differentiation. Finally, the data suggest that Gnl2 and NS affect cell cycle exit of neural progenitors by regulating the expression of cell cycle regulators independently of p53.