Homeobox genes Gsx1 and Gsx2 (formerly Gsh1 and Gsh2) are among the earliest transcription factors expressed in neuronal progenitors of the lateral ganglionic eminence (LGE) in the ventral telencephalon. Gsx2 is required for the early specification of LGE progenitor cells and recently has been shown to specify different LGE neuronal subtypes at distinct time points. In Gsx2 mutants, Gsx1 compensates, at least in part, for the loss of Gsx2 in the specification of LGE neuronal subtypes. Because no specific phenotype has been described in Gsx1 mutants, it is unclear what role this factor plays in the development of the ventral telencephalon. Here, we used a gain-of-function approach to express either Gsx1 or Gsx2 throughout the telencephalon and found that Gsx1 functions similarly to Gsx2 in the specification of LGE identity. However, our results show that Gsx1 and Gsx2 differentially regulate the maturation of LGE progenitors. Specifically, Gsx2 maintains LGE progenitors in an undifferentiated state, whereas Gsx1 promotes progenitor maturation and the acquisition of neuronal phenotypes, at least in part, through the down-regulation of Gsx2. These unique results indicate that the two closely related Gsx genes similarly regulate LGE patterning but oppositely control the balance between proliferation and differentiation in the neuronal progenitor pool.