The midbrain dopaminergic (mDA) neurons of the substantia nigra and the ventral tegmental area play a fundamental role in the control of voluntary movement and the regulation of emotion, and are severely affected in Parkinson's disease. Recent advances in mouse genetics and vertebrate development have provided us with insight into the genetic cascades involved in the development of mDA neurons, including the induction of mDA neuron progenitors in the ventral mesencephalon, the specification of the mDA neuronal fate and the maintenance of postmitotic mDA neurons. In parallel, rapid progress has been made in the generation of DA neurons from pluripotent stem cells and the development of stem cell-based therapies for Parkinson's disease. Here, we summarize the new findings via the developmental progression of mDA neurons and outline how this knowledge has been exploited to develop novel paradigms for the in vitro generation of these neurons from embryonic stem cells.