Inactivation of the LIM-homeodomain 2 gene (Lhx2) results in a severe defect in specification of olfactory sensory neurons (OSNs). However, the ramifications of lack of Lhx2-dependent OSN specification for formation of the primary olfactory pathway have not been addressed, since mutant mice die in utero. We have analyzed prenatal and postnatal consequences of conditionally inactivating Lhx2 selectively in OSNs. A cell-autonomous effect is that OSN axons cannot innervate their target, the olfactory bulb. Moreover, the lack of Lhx2 in OSNs causes unpredicted, non-cell-autonomous phenotypes. First, the olfactory bulb shows pronounced hypoplasia in adults, and the data suggest that innervation by correctly specified OSNs is necessary for adult bulb size and organization. Second, absence of an olfactory nerve in the conditional mutant reveals that the vomeronasal nerve is dependent on olfactory nerve formation. Third, the lack of a proper vomeronasal nerve prevents migration of gonadotropin-releasing hormone (GnRH) cells the whole distance to their final positions in the hypothalamus during embryo development. As adults, the conditional mutants do not pass puberty, and these findings support the view of an exclusive nasal origin of GnRH neurons in the mouse. Thus, Lhx2 in OSNs is required for functional development of three separate systems.