The nuclear receptor transcription factor, nor-1, is expressed during mammalian development predominantly in the nervous system and is induced in a cell-specific manner in nonneuronal cells in response to a variety of extracellular stimuli. To elucidate the essential developmental functions of this transcription factor, we have analyzed the consequences of its elimination on central nervous system development in mice. Here we show that null mutant mice lacking nor-1 respond with increased limbic seizure activity to the excitotoxic glutamate receptor agonist kainic acid. We demonstrate that these abnormalities are associated with defective postnatal hippocampal development exemplified by abnormal axonal guidance of dentate gyrus granule and mossy cells, disorganization of the pyramidal cell layer, and early postnatal death of pyramidal neurons in the CA1 field of the hippocampus. Our data indicate that nor-1 plays a critical role in neuronal survival and axonal guidance in the developing murine hippocampus and that hippocampal dysgenesis in nor-1^−/− mice may be an underlying cause of seizure susceptibility.