We are studying the role of the evolutionarily conserved tlx gene in forebrain development in mice. Tlx is expressed in the ventricular zone that gives rise to neurons and glia of the forebrain. We have shown by mutating the tlx gene in mice, that in the absence of this transcription factor, mutant animals survive, but suffer specific anatomical defects in the limbic system. Because of these developmentally induced structural changes, mice with a mutation in the tlx gene can function, but exhibit extreme behavioral pathology. Mice show heightened aggressiveness, excitability, and poor cognition. In this article, we present a summary of our findings on the cellular and behavioral changes in the forebrain of mutant animals. We show that absence of the tlx gene leads to abnormal proliferation and differentiation of progenitor cells (PCs) in the forebrain from embryonic day 9 (E9). These abnormalities lead to hypoplasia of superficial cortical layers and subsets of GABAergic interneurons in the neocortex. We examined the behavior of mutant animals in three tests for anxiety/fear: the open field, the elevated plus maze, and fear conditioning. Mutant animals are less anxious and less fearful when assessed in the elevated plus and open-field paradigm. In addition, mutant animals do not condition to either the tone or the context in the fear-conditioning paradigm. These animals, therefore, provide a genetic tool to delineate structure/function relationships in defined regions of the brain and decipher how their disruption leads to behavioral abnormalities.