The mammalian hippocampus contains the neural circuitry that is crucial for cognitive functions such as Learning and memory. The development of such circuitry is dependent on the generation and correct placement of the appropriate number and types of neurons. Mice Lacking function of the LIM homeobox gene Lhx5 showed a defect in hippocampus development. Hippocampal neural precursor cells were specified and proliferated, but many of them failed to either exit the cell cycle or to differentiate and migrate properly. Lhx5 is therefore essential for the regulation of precursor cell proliferation and the control of neuronal differentiation and migration during hippocampal development.