The discovery of novel molecules capable of modulating neurogenesis will contribute to explore novel therapeutic approaches and to clarify the physiological role of neurogenesis. Development of small molecules can be targeted to the regulation of progenitor cell proliferation, survival, migration or maturation and might be applied to augmenting physiological neurogenesis already present in the dentate gyrus or subventricular zone/olfactory bulb or to normally non-neurogenic regions important for neuropathological conditions. In the present study, in vitro model for neurogenesis was developed by isolation of neonatal rat hippocampal and cortical cells. These cells were both cultured independently and with bone marrow stromal cells (BMSCs). The effect of Isoxylitones (ISOX) during proliferation, differentiation and survival of the cultured cells under normal and hypoxic condition was studied. A dose dependent increase in cell viability of treated cells was observed in alamarBlue and MTT assays for proliferation. BrdU cell proliferation assay for growth of newly born cells was also performed and significantly higher cell population was recorded in the treated groups. To study the effect of ISOX on recovery of hypoxic cells, the cortical and hippocampal cells were cultured and given hypoxic shock followed by ISOX treatment. A significant recovery effect was seen which ensures its capability to modulate neuronal cell survival. The markers associated with neuronal lineage were analyzed to study the stage-specific neuronal differentiation and functional maturation of ISOX treated cultures. Themarkers included in the present study were nestin, β-tubulin III, GFAP and calretinin. In addition, transcription factors markers, NeuroD1 and Neurogenin-2, were used to analyze the induction of differentiation and activating factors for neurogenesis. The immunocytochemical analysis of above mentioned markers suggests that ISOX is involved in enhancement of neural progenitor cells as nestin expression was increased. The ISOX also supported the neuronal differentiation through inducing NeuroD1 and Neurogenin-2 transcription factors. The cocultured hippocampal and cortical cells with or without ISOX treatment demonstrated the generation of neuronal cells with marked increase of nestin, tubulin and calretinin expression. Additionally a significant induction of transcription factors NeuroD1 and Neurogenin-2 was also observed in cocultured treated groups. Based on our findings, we conclude that ISOX have a potential to support cortical and hippocampal cells survival and induction of transcription factors NeuroD1 and Neurogenin-2 and neuronal protein markers (nestin tubulin, calretinin) may provide cell stage-specific molecular and cellular mechanistic clues for understanding the potential effects of ISOX on the neurodevelopment. Our results regarding cocultured cells demonstrated the successful differentiation of BMSCs into neuronal like cells by co-culturing with hippocampal and cortical cells. Additionally the ISOX have capability to potentiate this differentiation of neuronal cells in cocultures. In short its cell survival and differential effects can be utilized for therapeutic rationale in neurodegenerative disorders.