The mammalian striatum controls the output of the basal ganglia via two distinct efferent pathways, the direct (i.e., striatonigral) and the indirect (i.e., striatopallidal) pathways. The LIM homeodomain transcription factor Islet1 (Isl1) is expressed in a subpopulation of striatal progenitors; however, its specific role in striatal development remains unknown. Our genetic fate-mapping results show that Isl1-expressing progenitors give rise to striatal neurons belonging to the striatonigral pathway. Conditional inactivation of Isl1 in the telencephalon resulted in a smaller striatum with fewer striatonigral neurons and reduced projections to the substantia nigra. Additionally, conditional inactivation in the ventral forebrain (including both the telencephalon and diencephalon) revealed a unique role for Isl1 in diencephalic cells bordering the internal capsule for the normal development of the striatonigral pathway involving PlexinD1-Semaphorin 3e (Sema3e) signaling. Finally, Isl1 conditional mutants displayed a hyperlocomotion phenotype, and their locomotor response to psychostimulants was significantly blunted, indicating that the alterations in basal ganglia circuitry contribute to these mutant behaviors.caudate-putamen | direct pathway | indirect pathway T he basal ganglia control many aspects of human behavior, including purposeful movements and appropriate behaviors, that are affected in childhood neurological disorders such as Tourette's syndrome and attention deficit hyperactivity disorder (ADHD) (1, 2). The striatum, also known as the caudate-putamen, represents the major component of the basal ganglia and is central in the processing of cortical information (reviewed in ref.3). Moreover, the striatum controls the output of the basal ganglia through two distinct efferent pathways: the direct (i.e., striatonigral) pathway and the indirect (i.e., striatopallidal) pathway. Both of these projection neuron subtypes use the inhibitory neurotransmitter gamma aminobutyric acid (GABA) (4). In addition to their different axonal targets, these two projection neuron subtypes express distinct neurochemical characteristics. The striatonigral projection neurons contain the neuropeptide substance P and express the dopamine D1 receptor at high levels (5, 6). Conversely, the striatopallidal projection neurons contain the neuropeptide enkephalin and high levels of the dopamine D2 receptor (5, 6). These two efferent pathways functionally oppose each other and thereby provide a balanced output from the basal ganglia (7). This balance is believed to be crucial for normal motor control (8).Striatal-projection neurons are known to derive from the lateral ganglionic eminence (LGE) (9-12) whereas their interneuron counterparts are derived from an adjacent domain, the medial ganglionic eminence (MGE) (11,13,14). Within the LGE, two developmental compartments have been identified: the ventral (v) LGE and the dorsal (d)LGE (15, 16). The vLGE is proposed to be the source of striatal-projection neurons (16) whereas the dLGE is thou...