Thyroid hormone (TH) deficiency during development causes severe and permanent neuronal damage, but the primary insult at the tissue level has remained unsolved. We have defined locomotor deficiencies in mice caused by a mutant thyroid hormone receptor α1 (TRα1) with potent aporeceptor activity attributable to reduced affinity to TH. This allowed identification of distinct functions that required either maternal supply of TH during early embryonic development or sufficient innate levels of hormone during late fetal development. In both instances, continued exposure to high levels of TH after birth and throughout life was needed. The hormonal dependencies correlated with severely delayed appearance of parvalbumin-immunoreactive GABAergic interneurons and increased numbers of calretinin-immunoreactive cells in the neocortex. This resulted in reduced numbers of fast spiking interneurons and defects in cortical network activity. The identification of locomotor deficiencies caused by insufficient supply of TH during fetal/perinatal development and their correlation with subtype-specific interneurons suggest a previously unknown basis for the neuronal consequences of endemic cretinism and untreated congenital hypothyroidism, and specifies TRα1 as the receptor isoform mediating these effects.