Dlx homeobox genes play an important role in vertebrate forebrain development. Dlx1/Dlx2 null mice die at birth with an abnormal cortical phenotype, including impaired differentiation and migration of GABAergic interneurons to the neocortex. However, the molecular basis for these defects downstream of loss of Dlx1/Dlx2 function is unknown. Neuropilin-2 (NRP-2) is a receptor for Class III semaphorins, which inhibit neuronal migration. Herein, we show that Neuropilin-2 is a specific DLX1 and DLX2 transcriptional target by applying chromatin immunoprecipitation to embryonic forebrain tissues. Both homeobox proteins repress Nrp-2 expression in vitro, confirming the functional significance of DLX binding. Furthermore, the homeodomain of DLX1 and DLX2 is necessary for DNA binding and this binding is essential for Dlx repression of Nrp-2 expression. Of importance, there is up-regulated and aberrant expression of NRP-2 in the forebrains of Dlx1/Dlx2 null mice. This is the first report that DLX1 or DLX2 can function as transcriptional repressors. Our data show that DLX proteins specifically mediate the repression of Neuropilin-2 in the developing forebrain. As well, our results support the hypothesis that down-regulation of Neuropilin-2 expression may facilitate tangential interneuron migration from the basal forebrain.