Dopaminergic neurons in the midbrain (mDNs) play a central role in the regulation of voluntary movement as well as other complex behaviors, and their loss is associated with Parkinson's disease (PD). The development of functional mDNs from multipotent progenitors is orchestrated by cell-intrinsic factors and cell-extrinsic environmental cues in a series of stages: early midbrain patterning, specification of mitotic precursors, postmitotic mDN development, and functional maturation. Of particular interest is how extracellular information is integrated with cell-intrinsic developmental programs. Cell fate mapping studies suggest that the stem-like progenitors for mDNs reside at the ventral midline floor plate, a region that also serves as a source of inductive signals for mDN specification such as Sonic Hedgehog (SHH). Cell replacement therapies, and in particular the use of embryonic or adult stem cell-derived dopaminergic neurons, offer potential novel treatment venues for PD, but such strategies require a detailed understanding of mDN development.