Midbrain GABA neurons, endowed with multiple morphological, physiological and molecular characteristics as well as projection patterns are key players interacting with diverse regions of the brain and capable of modulating several aspects of behavior. The diversity of these GABA neuronal populations based on their location and function in the dorsal, medial or ventral midbrain has challenged efforts to rapidly uncover their developmental regulation. Here we review recent developments that are beginning to illuminate transcriptional control of GABA neurons in the embryonic midbrain (mesencephalon) and discuss its implications for understanding and treatment of neurological and psychiatric illnesses.