Selective neuronal loss in the substantia nigra (SNc), as described for Parkinson's disease (PD) in humans and for Pitx3 deficiency in mice,highlights the existence of neuronal subpopulations. As yet unknown subset-specific gene cascades might underlie the observed differences in neuronal vulnerability. We identified a developmental cascade in mice in which Ahd2 (Aldh1a1) is under the transcriptional control of Pitx3. Interestingly, Ahd2 distribution is restricted to a subpopulation of the meso-diencephalic dopaminergic (mdDA) neurons that is affected by Pitx3 deficiency. Ahd2 is involved in the synthesis of retinoic acid(RA), which has a crucial role in neuronal patterning, differentiation and survival in the brain. Most intriguingly, restoring RA signaling in the embryonic mdDA area counteracts the developmental defects caused by Pitx3 deficiency. The number of tyrosine hydroxylase-positive (TH+)neurons was significantly increased after RA treatment in the rostral mdDA region of Pitx3^-/- embryos. This effect was specific for the rostral part of the developing mdDA area, and was observed exclusively in Pitx3^-/- embryos. The effect of RA treatment during the critical phase was preserved until later in development, and our data suggest that RA is required for the establishment of proper mdDA neuronal identity. This positions Pitx3 centrally in a mdDA developmental cascade linked to RA signaling. Here, we propose a novel mechanism in which RA is involved in mdDA neuronal development and maintenance, providing new insights into subset-specific vulnerability in PD.