Recurrent exposure of the developing fetus to cocaine produces persistent alterations in structure and function of the cerebral cortex. Neurons of the cerebral cortex are derived from two sources: projection neurons from the neuroepithelium of the dorsal pallium and interneurons from the ganglionic eminence of the basal telencephalon. The interneurons are GABAergic and reach the cerebral cortex via a tangential migratory pathway. We found that recurrent, transplacental exposure of mouse embryos to cocaine from embryonic day 8 to 15 decreases tangential neuronal migration and results in deficits in GABAergic neuronal populations in the embryonic cerebral wall. GABAergic neurons of the olfactory bulb, which are derived from the ganglionic eminence via the rostral migratory pathway, are not affected by the cocaine exposure suggesting a degree of specificity in the effects of cocaine on neuronal migration. Thus, one mechanism by which prenatal cocaine exposure exerts deleterious effects on cerebral cortical development may be by decreasing GABAergic neuronal migration from the ganglionic eminence to the cerebral wall. The decreased GABA neuron migration may contribute to persistent structural and functional deficits observed in the exposed offspring.