The subcommissural organ (SCO) is an ancient and evolutionarily conserved gland in the brain located at the entrance of the aqueduct of Sylvius. It exists in species as distantly related as amphioxus and humans, but the function of the SCO is still mysterious. Comparison of transcriptomes between SCO and non-SCO brain regions revealed three unique genes, namely Sspo, Car3, and Spdef, that are highly enriched in the SCO. We generated the corresponding gene knock-in mouse strains utilizing the Cre/lox recombinase system for specific expression in SCO cells. Genetic ablation of SCO cells at embryonic stages with these strains revealed that SCO excision resulted in severe hydrocephalus and developmental defects in the brain. Abnormalities were also observed for neuronal migration and axon and dendrite development in the cerebral cortex. Taking advantage of non-targeted peptidomic analysis, we identified three SCO-derived peptides, namely thymosin beta 4 (Tβ4), thymosin beta 10 (Tβ10), and NP24. We found that these SCO peptides contributed to neurite development and neuronal survival in vitro. Indeed, application of a cocktail containing Tβ4, Tβ10 and NP24 to SCO-ablated brain ventricles substantially rescued their developmental defects. Our results demonstrate that SCO-derived peptides play critical roles in neuronal development.