Homeodomain-containing genes of the Dlx family are expressed in the developing basal ganglia. To investigate the role of Dlx genes during development, we studied their cellular localization in primary cultures of embryonic basal telencephalon, and examined the changes in cellular phenotypes resulting from blockade of Dlx-2 expression. Cells containing Dlx-1, Dlx-2, and Dlx-5 mRNAs are immature cells of the neuronal lineage expressing the microtubule-associated proteins (MAPs) MAP1B and MAP2, but not glial fibrillary acidic protein (GFAP). Treatment of these cells with antisense oligonucleotides targeted to Dlx-2 caused a specific decrease of Dlx-2 mRNA and protein. This decrease in the Dlx-2 gene product was associated with a decrease in the expression of MAP2, a protein localized in neuronal dendrites, along with a smaller decrease in the 200-kDa neurofilament subunit (NF-H). Proteins expressed preferentially in axons were unchanged. This reduction in MAP2 expression was associated with a decrease in dendrite outgrowth and an increased level of cell proliferation. None of these changes were elicited by antisense oligonucleotides targeted to Dlx-1. We suggest that the Dlx-2 gene product regulates two interrelated aspects of neuronal differentiation: the exit from the mitotic cycle and the capability to grow MAP2-positive dendrites. As such, this gene product may be important for the establishment of neuronal polarity, setting the stage for afferent synaptic connectivity.