Neural activity during development critically shapes postnatal wiring of the mammalian brain. This is best illustrated by the sensory systems, in which the patterned feed-forward excitation provided by sensory organs and experience drives the formation of mature topographic circuits capable of extracting specific features of sensory stimuli. In contrast, little is known about the role of early activity in the development of the basal ganglia, a phylogenetically ancient group of nuclei fundamentally important for complex motor action and reward-based learning. These nuclei lack direct sensory input and are only loosely topographically organized, forming interlocking feed-forward and feed-back inhibitory circuits without laminar structure. Here we use transgenic mice and viral gene transfer methods to modulate neurotransmitter release and neuronal activity in vivo in the developing striatum. We find that the balance of activity between the two inhibitory and antagonist pathways in the striatum regulates excitatory innervation of the basal ganglia during development. These effects indicate that the propagation of activity through a multi-stage network regulates the wiring of the basal ganglia, revealing an important role of positive feedback in driving network maturation.