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Little is known about genetic mechanisms that regulate the ratio of cortical excitatory and inhibitory neurons. We show that NPAS1 and NPAS3 transcription factors (TFs) are expressed in progenitor domains of the mouse basal ganglia (subpallium, MGE, and CGE). NPAS1(-/-) mutants had increased proliferation, ERK signaling, and expression of Arx in the MGE and CGE. NPAS1(-/-) mutants also had increased neocortical inhibition (sIPSC and mIPSC) and generated an excess of somatostatin(+) (SST) (MGE-derived) and vasoactive intestinal polypeptide(+) (VIP) (CGE-derived) neocortical interneurons, but had a normal density of parvalbumin(+) (PV) (MGE-derived) interneurons. In contrast, NPAS3(-/-) mutants showed decreased proliferation and ERK signaling in progenitors of the ganglionic eminences and had fewer SST(+) and VIP(+) interneurons. NPAS1 repressed activity of an Arx enhancer, and Arx overexpression resulted in increased proliferation of CGE progenitors. These results provide insights into genetic regulation of cortical interneuron numbers and cortical inhibitory tone.