How the developmental potential of differentiating stem cell progeny becomes rapidly and stably restricted following asymmetric stem cell division is unclear. In the fly larval brain, earmuff (erm) uniquely functions to restrict the developmental potential of intermediate neural progenitors (INPs) generated by asymmetrically dividing neural stem cells (neuroblasts). Here we demonstrate that the histone deacetylase Hdac1/Rpd3 functions together with self-renewal transcriptional repressors to maintain the erm immature INP enhancer in an inactive but poised state in neuroblasts. Within 2 hr of immature INP birth, downregulation of repressor activities alleviates Rpd3-mediated repression on the erm enhancer, enabling acetylation of multiple histone proteins and activating Erm expression. Erm restricts the developmental potential in immature INPs by repressing genes encoding neuroblast transcriptional activators. We propose that poising the fast-activating enhancers of master regulators of differentiation through continual histone deacetylation in stem cells enables self-renewal and rapid restriction of developmental potential following asymmetric division.