Dopamine is a neuromodulator the functions of which in the regulation of complex behaviors such as mood, motivation, and attention are well known. Dopamine appears in the brain early in the embryonic period when none of those behaviors is robust, raising the possibility that dopamine may influence brain development. The effects of dopamine on specific developmental processes such as neurogenesis are not fully characterized. The neostriatum is a dopamine-rich region of the developing and mature brain. If dopamine influenced neurogenesis, the effects would likely be pronounced in the neostriatum. Therefore, we examined whether dopamine influenced neostriatal neurogenesis by influencing the cell cycle of progenitor cells in the lateral ganglionic eminence (LGE), the neuroepithelial precursor of the neostriatum. We show that dopamine arrives in the LGE via the nigrostriatal pathway early in the embryonic period and that neostriatal neurogenesis progresses in a dopamine-rich milieu. Dopamine D1-like receptor activation reduces entry of progenitor cells from the G(1)- to S-phase of the cell cycle, whereas D2-like receptor activation produces the opposite effects by promoting G(1)- to S-phase entry. D1-like effects are prominent in the ventricular zone, and D2-like effects are prominent in the subventricular zone. The overall effects of dopamine on the cell cycle are D1-like effects, most likely because of the preponderance of D1-like binding sites in the embryonic neostriatum. These data reveal a novel developmental role for dopamine and underscore the relevance of dopaminergic signaling in brain development.