In rodents, cortical interneurons originate from the medial ganglionic eminence (MGE) and caudal ganglionic eminence (CGE) according to precise temporal schedules. The mechanisms controlling the specification of CGE-derived interneurons and their role in cortical circuitry are still unknown. Here, we show that COUP-TFI expression becomes restricted to the dorsal MGE and CGE at embryonic day 13.5 in the basal telencephalon. Conditional loss of function of COUP-TFI in subventricular precursors and postmitotic cells leads to a decrease of late-born, CGE-derived, VIP (vasoactive intestinal peptide)- and CR (calretinin)-expressing bipolar cortical neurons, compensated by the concurrent increase of early-born MGE-derived, PV (parvalbumin)-expressing interneurons. Strikingly, COUP-TFI mutants are more resistant to pharmacologically induced seizures, a phenotype that is dependent on GABAergic signaling. Together, our data indicate that COUP-TFI controls the delicate balance between MGE- and CGE-derived cortical interneurons by regulating intermediate progenitor divisions and ultimately affecting the activity of the cortical inhibitory circuitry.