Various factors, including the orphan nuclear receptor Nurr1, have been implicated in dopamine biosynthesis, but many of the specific events involved in this process have to be determined. Using genetic manipulations in mice, the obligatory role for Nurr1 in dopamine (DA) biosynthesis has been documented; however, the mechanism remains unclear. DA biosynthetic enzymes, transporters and receptors are absent in the substantia nigra (SN) and the ventral tegmental area (VTA) of Nurr1-null neonates. The current study establishes that the loss of Nurr1 function does not affect the normal ventralization of neuroepithelial cells to the ventral midbrain, their differentiation into neurons, and their topographical pattern in the SN and VTA. Futhermore, the absence of Nurr1 does not affect the survival of these DA precursor cells in the ventral midbrain, as determined by quantitative analysis of cells, expressing the general neuronal nuclear marker (NeuN) and the TUNEL assay for apoptosis. These neurons express cholecystokinin (CCK), a co-transmitter of dopaminergic neurons in this area. The untranslated exon 1-2 of the Nurr1 gene, which remains intact after homologous recombination, revealed the presence of dopaminergic precursors in the ventral midbrain of the Nurr1-null mice. In addition, these neurons establish their nigrostriatal projections, as shown by axonal transport of a fluorescent tracer, DiI. These results provide evidence that Nurr1 is essential for terminal differentiation of the dopaminergic neurons in the ventral midbrain but does not affect the early steps of their neurogenesis, migration, survival and striatal projections. Our findings suggest that activation of Nurr1 might be therapeutically useful in Parkinson's disease.