Prenatal stress has been widely demonstrated to have links with behavioral problems in clinical populations and animal models, however, few investigations have examined the immediate developmental events that are affected by prenatal stress. Here, we utilize GAD67GFP transgenic mice in which GABAergic progenitors express green fluorescent protein (GFP) to examine the impact of prenatal stress on the development of these precursors to inhibitory neurons. Pregnant female mice were exposed to restraint stress three times daily from embryonic day 12 (E12) onwards. Their offspring demonstrated changes in the distribution of GFP-positive (GFP+) GABAergic progenitors in the telencephalon as early as E13 and persisting until postnatal day 0. Changes in distribution reflected alterations in tangential migration and radial integration of GFP+ cells into the developing cortical plate. Fate mapping of GAD67GFP+ progenitors with bromodeoxyuridine injected at E13 demonstrated a significant increase of these cells at P0 in anterior white matter. An overall decrease in GAD67GFP+ progenitors at P0 in medial frontal cortex could not be attributed to a reduction in cell proliferation. Significant changes in dlx2, nkx2.1 and their downstream target erbb4, transcription factors which regulate interneuron migration, were found within the prenatally stressed developing forebrain, while no differences were seen in mash1, a determinant of interneuron fate, bdnf, a maturation factor for GABAergic cells or fgf2, an early growth/differentiation factor. These results demonstrate that early disruption in GABAergic progenitor migration caused by prenatal stress may be responsible for neuronal defects in disorders with GABAergic abnormalities like schizophrenia.