Of the neurotransmitters that influence neurogenesis, gamma-aminobutyric acid (GABA) plays an outstanding role, and GABA receptors support non-synaptic signaling in progenitors and migrating neurons. Here, we report that expression levels of diazepam binding inhibitor (DBI), an endozepine that modulates GABA signaling, regulate embryonic neurogenesis, affecting the long-term outcome regarding the number of neurons in the postnatal mouse brain. We demonstrate that DBI is highly expressed in radial glia and intermediate progenitor cells in the germinal zones of the embryonic mouse brain that give rise to excitatory and inhibitory cells. The mechanism by which DBI controls neurogenesis involves its action as a negative allosteric modulator of GABA-induced currents on progenitor cells that express GABA A receptors containing γ 2 subunits. DBI's modulatory effect parallels that of GABA A -receptor-mediating signaling in these cells in the proliferative areas, reflecting the tight control that DBI exerts on embryonic neurogenesis. [Display omitted] • DBI is expressed in neural progenitors of the prenatal murine telencephalon • DBI and its processing product, ODN, reduce GABAergic currents in neural progenitors • DBI/ODN decreases neural progenitor proliferation in vivo via GABA signaling Everlien and colleagues demonstrate that the endozepine DBI is expressed in neural stem cells and progenitors of the prenatal murine telencephalon. DBI negatively modulates GABA A -receptor-mediated currents in neural progenitor cells. This translates into decreased prenatal progenitor proliferation and fewer excitatory and inhibitory neurons in the postnatal mouse brain. [ABSTRACT FROM AUTHOR]