To model low-grade astrocytoma (LGA) formation, we introduced R132H IDH1, P53 shRNA and ATRX shRNA in human neural stem cells (NSCs). These oncogenic hits blocked NSC differentiation, increased invasiveness in vivo and led to an epigenetic and transcriptional profile resembling IDH1-mutant human LGAs. The differentiation block was caused by transcriptional silencing of transcription factor SOX2. Ectopic expression of SOX2 was sufficient to rescue the differentiation block. We found that SOX2 down-regulation was secondary to disassociation of its promoter from a putative long-range enhancer ~700kb downstream of SOX2. This occurred due to reduced binding of the chromatin organizer CTCF to its methylated DNA motifs and disrupted chromatin looping. Our human model of IDH-mutant LGA implicates impaired NSC differentiation due to epigenetic repression of SOX2 as an early driver of gliomagenesis.