Inactivation of transcription factor Foxa1 in mice results in neonatal mortality of unknown cause. Here, we report that ablation of Foxa1 causes impaired development and loss of the subthalamic nucleus (STN). Functional deficits in the STN have been implicated in the etiology of Huntington's and Parkinson's disease. We show that neuronal ablation by Synapsin1-Cre-mediated Foxa1 deletion is sufficient to induce hyperlocomotion in mice. Transcriptome profiling of STN neurons in conditional Foxa1 knockout mice revealed changes in gene expression reminiscent of those in neurodegenerative diseases. We identified Ppargc1a, a transcriptional co-activator that is implicated in neurodegeneration, as a Foxa1 target. These findings were substantiated by the observation of Foxa1-dependent demise of STN neurons in conditional models of Foxa1 mutant mice. Finally, we show that the spontaneous firing activity of Foxa1-deficient STN neurons is profoundly impaired. Our data reveal so far elusive roles of Foxa1 in the development and maintenance of STN function.