Cell competition acts as a quality-control mechanism that eliminates cells less fit than their neighbors to optimize organ development. Whether and how competitive interactions occur between neural progenitor cells (NPCs) in the developing brain remains unknown. Here we show that endogenous cell competition occurs and intrinsically correlates with Axin2 expression level during normal brain development. Induction of genetic mosaicism predisposes Axin2-deficient NPCs to behave as ‘losers’ in mice and undergo apoptotic elimination, but homogeneous ablation of Axin2 does not promote cell death. Mechanistically, Axin2 suppresses the p53 signaling pathway at the post-transcriptional level to maintain cell fitness, and Axin2-deficient cell elimination requires p53-dependent signaling. Furthermore, mosaic Trp53 deletion confers a ‘winner’ status to p53-deficient cells that outcompete their neighbors. Conditional loss of both Axin2 and Trp53 increases cortical area and thickness, suggesting that Axin2-p53 axis may coordinate to survey cell fitness, regulate natural cell competition, and optimize brain size during neurodevelopment.