LIM homeodomain transcription factors are critical regulators of early development in multiple systems but have yet to be examined for a role in circuit formation. The LIM homeobox gene Lhx2 is expressed in cortical progenitors during development and also in the superficial layers of the neocortex in maturity. However, analysis of Lhx2 function at later stages of cortical development has been hampered by severe phenotypes associated with early loss of function. We identified a particular Cre-recombinase line that acts in the cortical primordium after its specification is complete, permitting an analysis of Lhx2 function in neocortical lamination, regionalization, and circuit formation by selective elimination of Lhx2 in the dorsal telencephalon. We report a profound disruption of cortical neuroanatomical and molecular features upon loss of Lhx2 in the cortex from embryonic day 11.5. A unique feature of cortical circuitry, the somatosensory barrels, is undetectable, and molecular patterning of cortical regions appears disrupted. Surprisingly, thalamocortical afferents innervate the mutant cortex with apparently normal regional specificity. Electrophysiological recordings reveal a loss of responses evoked by stimulation of individual whiskers, but responses to simultaneous stimulation of multiple whiskers were present, suggesting that thalamic afferents are unable to organize the neurocircuitry for barrel formation because of a cortex-specific requirement of Lhx2. We report that Lhx2 is required for the expression of transcription factor paired box gene 6, axon guidance molecule Ephrin A5, and the receptor NMDA receptor 1. These genes may mediate Lhx2 function in the formation of specialized neurocircuitry necessary for neocortical function.