Lhx6 and Lhx8 transcription factor coexpression in early-born MGE neurons is required to induce neuronal Shh expression. We provide evidence that these transcription factors regulate expression of a Shh enhancer in MGE neurons. Lhx6 and Lhx8 are also required to prevent Nkx2-1 expression in a subset of pallial interneurons. Shh function in early-born MGE neurons was determined by genetically eliminating Shh expression in the MGE mantle zone (MZ). This mutant had reduced SHH signaling in the overlying progenitor zone, which led to reduced Lhx6, Lhx8, and Nkx2-1 expression in the rostrodorsal MGE and a preferential reduction of late-born somatostatin+ and parvalbumin+ cortical interneurons. Thus, Lhx6 and Lhx8 regulate MGE development through autonomous and nonautonomous mechanisms, the latter by promoting Shh expression in MGE neurons, which in turn feeds forward to promote the developmental program of the rostrodorsal MGE.
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