The specification and differentiation of serotonergic (5-HT) neurons require both extrinsic signaling molecules and intrinsic transcription factors to work in concert or in cascade. Here we identify the genetic cascades that control the specification and differentiation of 5-HT neurons in mice. A major determinant in the cascades is an LIM homeodomain-containing gene, Lmx1b, which is required for the development of all 5-HT neurons in the central nervous system. Our results suggest that, during development of 5-HT neurons, Lmx1b is a critical intermediate factor that couples Nkx2-2-mediated early specification with Pet1-mediated terminal differentiation. Moreover, our data indicate that genetic cascades controlling the caudal and rostral 5-HT neurons are distinct, despite their shared components.