We have cultivated highly uniform populations of neural precursor cells, which retain their region-specific identities, from various rat embryonic brain regions. The roles of the proneural basic-helix-loop-helix (bHLH) factors neurogenin2 (Ngn2) and Mash1 in gamma-aminobutyric acid (GABA) neuron differentiation were explored in the region-specific cultures. Consistent with previous in vivo studies, forced expression of Mash1 promoted GABA neuron formation from the precursors derived from the developing forebrains, whereas Ngn2 displayed an inhibitory role in forebrain GABA neuron differentiation. Functional analyses of mutant bHLH proteins indicated that the helix-loop-helix domains of Mash1 and Ngn2, known as the structures for protein-protein interactions, impart the distinct activities. Intriguingly, the regulatory activities of Mash1 and Ngn2 in GABA neuron differentiation from the hindbrain- and spinal cord-derived precursor cells were completely opposite of those observed in the forebrain-derived cultures: increased GABA neuron yield by Ngn2 and decreased yield by Mash1 were shown in the precursors of those posterior brain regions. No clear difference that depended on dorsal-ventral brain regions was observed in the bHLH-mediated activities. Finally, we demonstrated that Otx2, the expression of which is developmentally confined to the regions anterior to the isthmus, is a factor responsible for the anterior-posterior region-dependent opposite effects of the bHLH proteins.