Background: Congenital cytomegalovirus (CMV) brain infection causes serious neuro-developmental sequelae including: mental retardation, cerebral palsy, and sensorineural hearing loss. But, the mechanisms of injury and pathogenesis to the fetal brain are not completely understood. The present study addresses potential pathogenic mechanisms by which this virus injures the CNS using a neonatal mouse model that mirrors congenital brain infection. This investigation focused on, analysis of cell types infected with mouse cytomegalovirus (MCMV) and the pattern of injury to the developing brain. Methodology/Principal Findings: We used our MCMV infection model and a multi-color flow cytometry approach to quantify the effect of viral infection on the developing brain, identifying specific target cells and the consequent effect on neurogenesis. In this study, we show that neural stem cells (NSCs) and neuronal precursor cells are the principal target cells for MCMV in the developing brain. In addition, viral infection was demonstrated to cause a loss of NSCs expressing CD133 and nestin. We also showed that infection of neonates leads to subsequent abnormal brain development as indicated by loss of CD24(hi) cells that incorporated BrdU. This neonatal brain infection was also associated with altered expression of Oct4, a multipotency marker; as well as down regulation of the neurotrophins BDNF and NT3, which are essential to regulate the birth and differentiation of neurons during normal brain development. Finally, we report decreased expression of doublecortin, a marker to identify young neurons, following viral brain infection. Conclusions: MCMV brain infection of newborn mice causes significant loss of NSCs, decreased proliferation of neuronal precursor cells, and marked loss of young neurons.