GABA-containing (GABAergic) interneurons play an important role in the function of the cerebral cortex. Through mostly inhibitory mechanisms, interneurons control hyperexcitability and synchronize and shape the spatiotemporal dynamics of cortical activity underlying various brain functions. Studies over the past 10 years have demonstrated that, in most mammals, interneurons originate during development from the subcortical telencephalon--the subpallium--and reach the cerebral cortex through tangential migration. Until now, interneurons have been demonstrated to derive exclusively from two subpallial regions, the medial ganglionic eminence and the caudal ganglionic eminence. Here, we show that another subpallial structure, the preoptic area, is a novel source of cortical GABAergic interneurons in the mouse. In utero labeling and genetic lineage-tracing experiments demonstrate that neurons born in this region migrate to the neocortex and hippocampus, where they differentiate into a distinct population of GABAergic interneurons with relatively uniform neurochemical, morphological, and electrophysiological properties.