The switch between quiescence and proliferation is central for neurogenesis and its alteration is linked to neurodevelopmental disorders such as microcephaly. However, intrinsic mechanisms that reactivate Drosophila larval neural stem cells, NSCs, to exit from quiescence are not well established. Here, we show that the spindle matrix complex containing Chromator (Chro) functions as a key intrinsic regulator of NSC reactivation downstream of extrinsic Insulin/IGF signalling. Chro also prevents neural stem cells from re-entering quiescence at later stages. Neural stem cell-specific in vivo profiling have identified many downstream targets of Chro in neural stem cells. We show that spindle matrix proteins can function as both transcriptional activator and repressor to regulate gene expression. Our data demonstrate that spindle matrix complex represents a key transcription factor that governs the reactivation of neural stem cells.