The functions of the nervous system are mediated by neural circuits that are formed during development and modulated by experiences. Central to the assembly of neural circuits is the regulation of synaptic connectivity by synaptic molecules and neuronal activity. Extensive studies have focused on identifying molecules involved in synapse formation. Besides factors promoting synaptogenesis, several antisynaptogenic factors have been discovered. These factors act in concert to ensure the timing and specificity of circuit formation. Moreover, progress has been made in revealing how neuronal activity governs the balance of excitatory and inhibitory synapses. Intriguingly, several transcription factors, as well as activity-dependent transcription of BDNF through promoter IV, have been shown to selectively regulate cortical inhibitory circuits by promoting GABAergic synapse formation.