Translocation of the Smoothened to the cell membrane is critical for sonic hedgehog activity. However, the biological importance of Smoothened itself has not been fully studied. To address this issue, we disabled Smoothened specifically in the dorsal telencephalon. Birth-date analysis and layer marker expression patterns revealed the slightly impaired development of the superficial layer neurons in the embryos of Emx1-Cre; Smoothened(fl/-) conditional knockout mice. Further analysis of the mutant embryos revealed a decrease in the number of intermediate progenitor cells. In the knockout mice, the expression of cyclin D2, but not cyclin D1 or cyclin E, was reduced in the dorsal telencephalon. In addition, the projections of dopaminergic neurons were affected during development, and the number of activated astrocytes was increased in the neocortex of the mutant mice. Our data suggest that Smoothened signaling, acting through cyclin D2, is critical for the proper development and maturation of the neocortex.