The type of vesicular transporter expressed by a neuron is thought to determine its neurotransmitter phenotype. We show that inactivation of the vesicular inhibitory amino acid transporter (Viaat, VGAT) leads to embryonic lethality, an abdominal defect known as omphalocele, and a cleft palate. Loss of Viaat causes a drastic reduction of neurotransmitter release in both GABAergic and glycinergic neurons, indicating that glycinergic neurons do not express a separate vesicular glycine transporter. This loss of GABAergic and glycinergic synaptic transmission does not impair the development of inhibitory synapses or the expression of KCC2, the K+ -Cl- cotransporter known to be essential for the establishment of inhibitory neurotransmission. In the absence of Viaat, GABA-synthesizing enzymes are partially lost from presynaptic terminals. Since GABA and glycine compete for vesicular uptake, these data point to a close association of Viaat with GABA-synthesizing enzymes as a key factor in specifying GABAergic neuronal phenotypes.