In the mammalian cerebral cortex, the developmental events governing the integration of excitatory projection neurons and inhibitory interneurons into balanced local circuitry are poorly understood. We report that different subtypes of projection neurons uniquely and differentially determine the laminar distribution of cortical interneurons. We find that in Fezf2⁻/⁻ cortex, the exclusive absence of subcerebral projection neurons and their replacement by callosal projection neurons cause distinctly abnormal lamination of interneurons and altered GABAergic inhibition. In addition, experimental generation of either corticofugal neurons or callosal neurons below the cortex is sufficient to recruit cortical interneurons to these ectopic locations. Strikingly, the identity of the projection neurons generated, rather than strictly their birthdate, determines the specific types of interneurons recruited. These data demonstrate that in the neocortex individual populations of projection neurons cell-extrinsically control the laminar fate of interneurons and the assembly of local inhibitory circuitry. Copyright © 2011 Elsevier Inc. All rights reserved.