These studies chart the development of gamma-aminobutyric acid (GABA)-ergic neurons in the three divisions of the thalamus (ventral thalamus, dorsal thalamus, and epithalamus). GABAergic neurons were identified by in situ hybridization to localize mRNA for 67-kDa glutamic acid decarboxylase (GAD(67)) and related to the morphological maturation of the thalamus in fetal and postnatal brains and to expression of transcription factors Gbx-2 and Tbr-1. Origins of GABAergic neurons were sought in in vitro slice preparations incubated in bromodeoxyuridine or injected with a carbocyanine dye. GABA neurons of ventral thalamus (reticular nucleus, ventral lateral geniculate nucleus, zona incerta, and nucleus of the fields of Forel) and of epithalamus appear at least 14 days before those intrinsic to dorsal thalamus. Ventral thalamus GABA cells are derived from a region connecting the ventricular zone of the third ventricle to the caudal ganglionic eminence. This region is delimited ventrally by the Tbr-1-expressing prethalamic eminence and dorsally by the Gbx-2-expressing part of the dorsal thalamus. GABA neurons of epithalamus are derived from the embryonic pretectum. Neurons continue to be added to the ventral thalamus, perireticular nucleus, entopeduncular nucleus, and substantia nigra from the ganglionic eminence as development proceeds. GAD(67)-expressing cells of dorsal thalamus become detectable only at birth and populate the thalamus from posterior to anterior over the first week of life. Although a very small number reaches the dorsal lateral geniculate nucleus from the caudal ganglionic eminence, there is no obvious new source of proliferating neurons at this stage. Intrinsic GABA cells of dorsal thalamus may, therefore, derive from an early generated population of cells that turns on a GABAergic phenotype only late in development.