Genetic labeling based on the Cre/lox reporter system has allowed the creation of fate maps for progenitor cells and their offspring. In the diencephalon, pools of progenitors express the plp transcripts in the zona limitans intrathalamica (ZLI), the basal plate of the diencephalon (bpD), and the posterior part of the hypothalamus. We used plp-Cre transgenics crossed with either Rosa26-lox-lacZ (R26R) or actin-lox gfp (Z/EG) reporter mice to investigate the progeny of plp-expressing ventricular cells in the diencephalon. We describe the subpopulations of prethalamic neurons derived from plp-activated progenitors, their possible migratory routes as development proceeds, and their final positional identity. Neurons derived from plp-expressing progenitors issued from the ZLI contribute to GABAergic cells in the zona incerta, the subgeniculate nucleus, the ventral lateral geniculate, and the intergeniculate leaflet. Plp(+) progenitors in the bpD and posterior hypothalamus appear to generate glutamatergic neurons in the subthalamic nucleus and GABAergic neurons in the mammillary and retromammillary tegmentum derivatives. In all these nuclei the contribution of plp(+) progenitors is only partial, illustrating the heterogeneity of origin of neurons in prethalamic and caudal hypothalamic nuclei.