Midbrain neurons synthesizing the neurotransmitter dopamine play a central role in the modulation of different brain functions and are associated with major neurological and psychiatric disorders. Despite the importance of these cells, the molecular mechanisms controlling their development are still poorly understood. The secreted glycoprotein Wnt1 is expressed in close vicinity to developing midbrain dopaminergic neurons. Here, we show that Wnt1 regulates the genetic network, including Otx2 and Nkx2-2, that is required for the establishment of the midbrain dopaminergic progenitor domain during embryonic development. In addition, Wnt1 is required for the terminal differentiation of midbrain dopaminergic neurons at later stages of embryogenesis. These results identify Wnt1 as a key molecule in the development of midbrain dopaminergic neurons in vivo. They also suggest the Wnt1-controlled signaling pathway as a promising target for new therapeutic strategies in the treatment of Parkinson's disease.