(1) Neurogenesis driven by neural stem cells (NSCs) is regulated by physiological and pathological factors. Melatonin (MT) has profound neurotrophic and neuroprotective effects. Hence, we studied the role of MT in regulating the viability and differentiation of NSCs derived from rat ventral midbrain. (2) NSCs were isolated from the rat ventral midbrain. The viability of NSCs was determined by 3-(4,5-dimethylthiazol-2-yl)-5-(3-carboxymethoxyphenyl)-2-(4-ulfophenyl)-2H-tetrazolium assay. The differentiation of NSCs was examined by analyzing the expression of the neural markers, MT receptors, brain derived neurotropic factor (BDNF) and glial cell line-derived neurotrophic factor (GDNF) with semi-quantitative RT-PCR, immunofluorescence cytochemistry, and Western blot. (3) Our results showed that MT could promote the viability of NSCs. In addition, MT could significantly elevate the mRNA and protein levels of tyroxine hydroxylase (TH), a marker of dopaminergic neurons, and decrease the expression of the astrocytes maker glial fibrillary acidic protein (GFAP). MT also increased the production of BDNF and GDNF in the cultured NSCs. Meanwhile, we first found that two subtypes of MT receptors, MT1 and MT2, were expressed in the ventral midbrain NSCs. (4) These results demonstrated that MT could induce NSCs to differentiate into dopaminergic neurons and decrease astrocyte production. These findings also suggest that MT could offer a beneficial tool in guiding directional differentiation of NSCs.