Bone morphogenetic protein 2 (BMP2), differentially regulates the developmental lineage commitment of neural stem cells (NSC) in central and peripheral nervous systems. However, the precise mechanism beneath such observations still remains illusive. To decipher the intricacies of this mechanism, we propose a generic mathematical model of BMP2 driven differentiation regulation of NSCs. The model efficiently captures the dynamics of the wild-type as well as various mutant and over-expression phenotypes for NSCs in central nervous system. Our model predicts that the differential developmental dynamics of the NSCs in peripheral nervous system can be reconciled by altering the relative positions of the two mutually interconnected bi-unstable switches inherently present in the steady state dynamics of the crucial developmental fate regulatory proteins as a function of BMP2 dose. This model thus provides a novel mechanistic insight and has the potential to deliver exciting therapeutic strategies for neuronal regeneration from NSCs of different origin.