The steroid receptor-type transcription factor Nurr1 has a crucial role in the development of the mesencephalic dopamine (DA) neurons. Although ectopic expression of Nurr1 in cultured neural precursor cells is sufficient in establishing the DA phenotype, Nurr1-induced DA cells are morphologically and functionally immature, suggesting the necessity of additional factor(s) for full neuronal differentiation. In this study, we demonstrate that neurogenic basic helix-loop-helix (bHLH) factors Mash1, neurogenins (Ngns) and NeuroD play contrasting roles in Nurr1-induced DA neuronal differentiation. Mash1, but not Ngn2, spatially and temporally colocalized with aldehyde dehydrogenase 2 (AHD2), a specific midbrain DA neuronal progenitor marker, in the early embryonic ventral mesencephalon. Forced expression of Mash1 caused immature Nurr1-induced DA cells to differentiate into mature and functional DA neurons as judged by electrophysiological characteristics, release of DA, and expression of presynaptic DA neuronal markers. By contrast, atonal-related bHLHs, represented by Ngn1, Ngn2 and NeuroD, repressed Nurr1-induced expression of DA neuronal markers. Domain-swapping experiments with Mash1 and NeuroD indicated that the helix-loop-helix domain, responsible for mediating dimerization of bHLH transcription factors, imparts the distinct effect. Finally, transient co-transfection of the atonal-related bHLHs with Nurr1 resulted in an E-box-independent repression of Nurr1-induced transcriptional activation of a reporter containing Nurr1-binding element (NL3) as well as a reporter driven by the native tyrosine hydroxylase gene promoter. Taken together, these findings suggest that Mash1 contributes to the generation of DA neurons in cooperation with Nurr1 in the developing midbrain whereas atonal-related bHLH genes inhibit the process.