Highly efficient neutron detectors are critical in many sectors, including national security, medicine, crystallography and astronomy. The main neutron detection technologies currently used involve He-gas-filled proportional counters and light scintillators for thermalized neutrons. Semiconductors could provide the next generation of neutron detectors because their advantages could make them competitive with or superior to existing detectors. In particular, solids with a high concentration of high-neutron-capture nuclides (such as Li, B) could be used to develop smaller detectors with high intrinsic efficiencies. However, no promising materials have been reported so far for the construction of direct-conversion semiconductor detectors. Here we report on the semiconductor LiInPSe and demonstrate its potential as a candidate material for the direct detection of thermal neutrons at room temperature. This compound has a good thermal-neutron-capture cross-section, a suitable bandgap (2.06 electronvolts) and a favourable electronic band structure for efficient electron charge transport. We used α particles from an Am source as a proxy for the neutron-capture reaction and determined that the compact two-dimensional (2D) LiInPSe detectors resolved the full-energy peak with an energy resolution of 13.9 per cent. Direct neutron detection from a moderated Pu-Be source was achieved using Li-enriched (95 per cent) LiInPSe detectors with full-peak resolution. We anticipate that these results will spark interest in this field and enable the replacement of He counters by semiconductor-based neutron detectors.