Two types of neurons containing gamma-aminobutyric acid (GABA) were identified in cultures of embryonic rat neocortex. Large GABAergic neurons were already present 4 hours after plating, whereas small ones appeared later. Both types were shown to be neurons by double labeling with GABA and microtubule-associated protein 2 (MAP2) immunocytochemistry. The large GABAergic neurons represented less than 5% of the adherent cells, developed neurites rapidly, and progressed synchronously through the polarization and differentiation steps characteristic of the whole neuronal population. During the second week in culture, these GABA-immunoreactive cells developed into large, stellate neurons with fairly homogeneous morphology and poorly ramified, straight dendrites. At the same time, the GABAergic neuropil increased greatly, and neurites of GABAergic neurons showed advancing maturity and smoothness. The axon of each cell covered extensive areas of the culture, frequently encircling the somata of unlabeled neurons in a basket-like fashion. Significant numbers of small GABAergic cells developed only in the absence of the mitotic inhibition routinely used to control glial proliferation. These late-born GABAergic neurons went through neuritogenesis when most of the other neurons were already forming synapses on their somatodendritic surfaces. In mature cultures, they had a multipolar or fusiform morphology with spine-bearing dendrites. They had small somata and were often present inside clusters of neurons. Their short axons showed no obvious basket-like pattern of arborization. Thus, the two types of GABAergic neurons identified in cortical cultures differed in their morphology, distribution, and developmental history. We propose that intercellular interactions during early synaptogenesis may play a role in the development of different morphological types of GABAergic neurons in vitro.