Pax6-positive radial glial (RG) cells are the progenitors of most glutamatergic neurons in the cortex, a lineage that can be recapitulated in vitro using embryonic stem (ES) cells. We show here that ES cells lacking Pax6, a transcription factor long known to be essential for cortical development, generate Mash1-positive RG cells that differentiate in GABAergic neurons. These neurons express high levels of the neurotrophin receptor p75NTR causing their rapid death. Pax6 function was also investigated following transplantation of ES cells in the developing chick telencephalon and in mice lacking both Pax6 and p75NTR. Taken together, our results indicate that reliable predictions can be made with cultured ES cells when used to explore the role of genes impacting early aspects of mammalian neurogenesis. They also provide a novel opportunity to compare the molecular constituents of glutamatergic with those of GABA-ergic neurons and to explore the mechanisms of their generation.