Retinoic acid (RA) signaling plays critical roles in diverse cellular processes during nervous system development. In mouse models, the roles for RA signals in telencephalic development remain unclear, partly because of the ambiguity of RA telencephalic sources after E8.75. Here, we have developed a genetic approach that utilizes Cre-lox technology to conditionally express a potent dominant negative retinoid receptor, RAR403, in vivo. This approach blocks RA signaling pathways at the receptor level, enabling the disruption of RA signals in contexts in which the RA source is unknown. RAR403 expression throughout the developing telencephalon causes pronounced hypoplasia resulting from defective proliferation in dorsal telencephalic progenitors and extensive cell death. Furthermore, Nkx2.1(+) progenitors in the medial ganglionic eminence (MGE) are misspecified such that they acquire a subset of lateral ganglionic eminence (LGE)-specific properties at the expense of MGE fates. This genetic approach reveals new roles for RA signaling in telencephalic proliferation, survival and fate specification, and underscores its utility in investigating the function of retinoid signaling pathways throughout peri- and postnatal development.