GDNF (glial cell line-derived neurotrophic factor) promotes the differentiation and migration of GABAergic neuronal precursors of the medial ganglionic eminence (MGE). These functions are dependent on the GPI-anchored receptor GFRα1, but independent of its two known transmembrane receptor partners RET and NCAM. Here we show that soluble GFRα1 is also able to promote differentiation and migration of GABAergic MGE neurons. These activities require endogenous production of GDNF. Although GDNF responsiveness is abolished in Gfra1−/− neurons, it can be restored upon addition of soluble GFRα1, a result that is only compatible with the existence of a previously unknown transmembrane signaling partner for the GDNF-GFRα1 complex in GABAergic neurons. The roles of two candidate transmembrane receptors previously implicated in GABAergic interneuron development - MET, a receptor for hepatocyte growth factor (HGF), and ErbB4, the neuregulin receptor – were examined. GDNF did not induce the activation of either receptor, nor did inhibition of MET or ErbB4 impair GDNF activity in GABAergic MGE neurons. Unexpectedly, however, inhibition of MET or HGF per se promoted neuronal differentiation and migration and enhanced the activity of GDNF on MGE neurons. These effects were dependent on endogenous GDNF and GFRα1, suggesting that MET signaling negatively regulates GDNF activity in the MGE. In agreement with this, Met mutant MGE neurons showed enhanced responses to GDNF and inhibition of MET or HGF increased Gfra1 mRNA expression in MGE cells. In vivo, expression of MET and GFRα1 overlapped in the MGE, and a loss-of-function mutation in Met increased Gfra1 expression in this region. Together, these observations demonstrate the existence of a novel transmembrane receptor partner for the GDNF–GFRα1 complex and uncover an unexpected interplay between GDNF–GFRα1 and HGF–MET signaling in the early diversification of cortical GABAergic interneuron subtypes.