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Although hypoxia-inducible factors (HIFs) are central regulators of cellular adaptation to oxygen and metabolic fluctuations in the mammalian brain, potential roles for HIF regulation during inhibitory neuron development are poorly understood. Here, we report that Nkx2.1-cre-driven conditional deletion of Hif1/2a in the medial ganglionic eminence (MGE) leads to reduced proliferation of Lhx6-positive interneuron precursors, whereas loss of von Hippel-Lindau (vHL), required for HIF degradation, drives increased precursor proliferation. Integrating single-cell transcriptomics, we identified HIF targets regulating proliferation and synaptogenesis. We also show that HIF1A directly activates glutamate ionotropic receptor NMDA type subunit 2B (GRIN2B), encoding glutamate ionotropic receptor N-methyl-D-aspartate (NMDA) subunit 2B. In the adult HIF1 conditional knockout (cKO) cortex, we observed decreased numbers of parvalbumin (PV) interneurons and fewer GABAergic synapses and GRIN2B/Bassoon puncta on layer 2/3 excitatory neurons, resulting in attenuated long-term potentiation. These findings identify non-canonical roles for HIF signaling that are essential for PV interneuron production, GRIN2B expression, and cortical circuit maturation and function.