The progenitor zones of the embryonic mouse ventral telencephalon give rise to GABAergic and cholinergic neurons. We have shown previously that two LIM-homeodomain (LIM-HD) transcription factors, Lhx6 and Lhx8, that are downstream of Nkx2.1, are critical for the development of telencephalic GABAergic and cholinergic neurons. Here we investigate the role of Ldb1, a nuclear protein that binds directly to all LIM-HD factors, in the development of these ventral telencephalon derived neurons. We show that Ldb1 is expressed in the Nkx2.1 cell lineage during embryonic development and in mature neurons. Conditional deletion of Ldb1 causes defects in the expression of a series of genes in the ventral telencephalon and severe impairment in the tangential migration of cortical interneurons from the ventral telencephalon. Similar to the phenotypes observed in Lhx6 or Lhx8 mutant mice, the Ldb1 conditional mutants show a reduction in the number of both GABAergic and cholinergic neurons in the telencephalon. Furthermore, our analysis reveals defects in the development of the parvalbumin-positive neurons in the globus pallidus and striatum of the Ldb1 mutants. These results provide evidence that Ldb1 plays an essential role as a transcription co-regulator of Lhx6 and Lhx8 in the control of mammalian telencephalon development.