Mesodiencephalic dopaminergic (mdDA) neurons control locomotion and emotion and are affected in multiple psychiatric and neurodegenerative diseases, including Parkinson’s disease (PD). The homeodomain transcription factor Pitx3 is pivotal in mdDA neuron development and loss of Pitx3 results in programming deficits in a rostrolateral subpopulation of mdDA neurons destined to form the substantia nigra pars compacta (SNc), reminiscent of the specific cell loss observed in PD. We show here that in adult mice in which the gene encoding a second homeoprotein, engrailed 1 (En1), has been deleted, dramatic loss of mdDA neurons and striatal innervation defects were observed, partially reminiscent of defects observed in Pitx3-/- mice. We then continue to reveal developmental crosstalk between En1 and Pitx3 through genome-wide expression analysis. During development, both En1 and Pitx3 are required to induce expression of mdDA genes in the rostrolateral subset destined to form the SNc. By contrast, Pitx3 and En1 reciprocally regulate a separate gene cluster, which includes Cck, demarcating a caudal mdDA subset in wild-type embryos. Whereas En1 is crucial for induction of this caudal phenotype, Pitx3 antagonizes it rostrolaterally. The combinatorial action of En1 and Pitx3 is potentially realized through at least three levels of molecular interaction: (1) influencing each other’s expression level, (2) releasing histone deacetylase-mediated repression of Nurr1 target genes and (3) modulating En1 activity through Pitx3-driven activation of En1 modulatory proteins. These findings show how two crucial mediators of mdDA neuronal development, En1 and Pitx3, interact in dopaminergic subset specification, the importance of which is exemplified by the specific vulnerability of the SNc found in PD.