The central serotonin (5-HT) neurotransmitter system is an important modulator of diverse physiological processes and behaviors; however, the transcriptional mechanisms controlling its development are largely unknown. The Pet-1 ETS factor is a precise marker of developing and adult 5-HT neurons and is expressed shortly before 5-HT appears in the hindbrain. Here we show that in mice lacking Pet-1, the majority of 5-HT neurons fail to differentiate. Remaining ones show deficient expression of genes required for 5-HT synthesis, uptake, and storage. Significantly, defective development of the 5-HT system is followed by heightened anxiety-like and aggressive behavior in adults. These findings indicate that Pet-1 is a critical determinant of 5-HT neuron identity and implicate a Pet-1-dependent program in serotonergic modulation of behavior.