Developmental exposure to 2,3,7,8-tetrachlorodibenzo-p-dioxin (TCDD) interferes with masculinization and defeminization of male sexual behaviors and gonadotropin release patterns. We previously demonstrated that the mRNA encoding the arylhydrocarbon receptor (AhR), a protein that mediates TCDD effects, is found in brain regions that control reproductive functions, most notably in the preoptic area (POA). The pattern of distribution of the AhR gene closely overlaps that of an enzyme necessary for Gamma-aminobutyric acid (GABA) synthesis, glutamic acid decarboxylase (GAD) 67. To test the hypothesis that GABAergic neurons in the POA are targets of TCDD during development, we used dual-label in situ hybridization histochemistry (ISHH) to co-localize GAD and AhR mRNAs in the region. In addition, we used ISHH to determine the effects of TCDD (1 microg/kg body weight, gestational day 15) on GAD 67 gene expression in POA regions in pups examined on postnatal day 3. We found that virtually all GABAergic neurons in the POA expressed the AhR gene. Furthermore, GAD 67 mRNA levels were higher in females than in males in the rostral POA/anteroventral periventricular nucleus (rPOA/AVPV) and in the rostral portion of the medial preoptic nucleus (MPN). TCDD abolished sex differences in the rPOA/AVPV but had no effect in the rostral MPN. In the caudal MPN, there were no sex differences in GAD 67 gene expression, but TCDD depressed expression specifically in males. Our findings demonstrate that GABAergic neurons in the brain are targets of TCDD and may mediate developmental effects of this contaminant on reproductive function.