TNFα is the main proinflammatory cytokine implicated in the pathogenesis of neurodegenerative disorders, but it also modulates physiological functions in both the developing and adult brain. In this study, we investigated a potential direct role of TNFα in determining phenotypic changes of a recently established cellular model of human basal forebrain cholinergic neuroblasts isolated from the nucleus basalis of Meynert (hfNBMs). Exposing hfNBMs to TNFα reduced the expression of immature markers, such as nestin and β-tubulin III, and inhibited primary cilium formation. On the contrary, TNFα increased the expression of TNFα receptor TNFR2 and the mature neuron marker MAP2, also promoting neurite elongation. Moreover, TNFα affected nerve growth factor receptor expression. We also found that TNFα induced the expression of DNA-methylation enzymes and, accordingly, downregulated genes involved in neuronal development through epigenetic mechanisms, as demonstrated by methylome analysis. In summary, TNFα showed a dual role on hfNBMs phenotypic plasticity, exerting a negative influence on neurogenesis despite a positive effect on differentiation, through mechanisms that remain to be elucidated. Our results help to clarify the complexity of TNFα effects in human neurons and suggest that manipulation of TNFα signaling could provide a potential therapeutic approach against neurodegenerative disorders.