The mechanisms underlying neurodevelopmental damage caused by virus infections remain poorly defined. Congenital human cytomegalovirus (HCMV) infection is the leading cause of fetal brain development disorders. Previous work has linked HCMV infection to perturbations of neural cell fate, including premature differentiation of neural progenitor cells (NPCs). Here, we show that HCMV infection of NPCs results in loss of the SOX2 protein, a key pluripotency-associated transcription factor. SOX2 depletion maps to the HCMV major immediate early (IE) transcription unit and is individually mediated by the IE1 and IE2 proteins. IE1 causes SOX2 downregulation by promoting the nuclear accumulation and inhibiting the phosphorylation of STAT3, a transcriptional activator of SOX2 expression. Deranged signaling resulting in depletion of a critical stem cell protein is an unanticipated mechanism by which the viral major IE proteins may contribute to brain development disorders caused by congenital HCMV infection.