The mouse Mgn protein (Helt) is structurally related to the neurogenic Drosophila hairy and Enhancer of split [h/E(spl)]proteins, but its unique structural properties distinguish it from other members of the family. Mgn expression shows a spatiotemporal correlation with GABAergic markers in several brain regions. We report here that homozygous Mgn-null mice die between the second and the fifth postnatal week of age, and show a complete depletion of Gad65 and Gad67 expression in the superior colliculus and a reduction in the inferior colliculus. Other brain regions, as well as other neural systems, are not affected. The progenitor GABAergic cells appear to be generated in right numbers but fail to become GABAergic neurons. The phenotype of the mice is consistent with reduced GABAergic activity. Thus, our in vivo study provides evidence that Mgn is the key regulator of GABAergic neurons, controlling their specification in the dorsal midbrain. Another conclusion from our results is that the function of Mgn shows a previously unrecognized role for h/E(spl)-related transcription factors in the dorsal midbrain GABAergic cell differentiation. Vertebrate h/E(spl)-related genes can no longer be regarded solely as a factors that confer generic neurogenic properties, but as key components for the subtype-neuronal identity in the mammalian CNS.