Three major cell production systems were identified in the lateral wall of the mouse telencephalon. These were morphologically evident as the medial and lateral elevations and the pallial crescent. Each was originally derived from a small, circumscribed, subset of ventricular cells. These formed the parent populations of large and proliferatively complex precursor pools which gave rise to the large numbers and considerable variety of neuron populations of the telencephalon. An attempt was made to identify the major neuron groups derived from each system by using the ventricular cell processes as a guide to the site of neuron origin. The proliferative changes occurring in the two elevations, the variety of their neuronal output, the early loss of a radial structure and the diversity of the final adult configurations were considered to represent a more complex series of changes than the corresponding events in the cortical tissue, which was generated from the pallial crescent where neurons accumulate within an adaptation of the original radial structure. It was considered that the number and complexity of the changes in the genome required to produce and organise such subcortical diversity was of a greater order of magnitude than those evident in the cortical areas. It was suggested that the genesis of the mammalian basal telencephalon should be considered as one of the major evolutionary achievements in the conglomerate of changes which occurred during the transition from the reptilian to the mammalian grade of organisation in the forebrain.