Neural networks are balanced by inhibitory and excitatory neuronal activity. The formation of these networks is initially generated through neuronal subtype specification controlled by transcription factors. The basic helix-loop-helix (bHLH) transcription factor Ptf1a is essential for the generation of GABAergic inhibitory neurons in the dorsal spinal cord, cerebellum, and retina. The transcription factor Rbpj is a transducer of the Notch signaling pathway that functions to maintain neural progenitor cells. Here we demonstrate Ptf1a and Rbpj interact in a complex that is required in vivo for specification of the GABAergic neurons, a function that cannot be substituted by the classical form of the bHLH heterodimer with E-protein or Notch signaling through Rbpj. We show that a mutant form of Ptf1a without the ability to bind Rbpj, while retaining its ability to interact with E-protein, is incapable of inducing GABAergic (Pax2)- and suppressing glutamatergic (Tlx3)-expressing cells in the chick and mouse neural tube. Moreover, we use an Rbpj conditional mutation to demonstrate that Rbpj function is essential for GABAergic specification, and that this function is independent of the Notch signaling pathway. Together, these findings demonstrate the requirement for a Ptf1a-Rbpj complex in controlling the balanced formation of inhibitory and excitatory neurons in the developing spinal cord, and point to a novel Notch-independent function for Rbpj in nervous system development.