The cre/loxP system is used routinely to manipulate gene expression in the mouse nervous system. In order to delete genes specifically from the telencephalon, the Foxg1-cre line was created previously by replacing the intron-less Foxg1 coding region with cre, resulting in a Foxg1 heterozygous mouse. As the telencephalon of heterozygous Foxg1 mice was reported to be normal, this genotype often has been used as the control in subsequent analyses. Here we describe substantial disruption of forebrain development of heterozygous mice in the Foxg1-cre line, maintained on the C57BL/6J background. High resolution magnetic resonance microscopy reveals a significant reduction in the volume of the neocortex, hippocampus and striatum. The alteration in the neocortex results, in part, from a decrease in its tangential dimension, although gross patterning of the cortical sheet appears normal. This decrease is observed in three different Foxg1 heterozygous mouse lines, independent of the method of achieving deletion of the Foxg1 gene. Although Foxg1 is not expressed in the diencephalon, three-dimensional magnetic resonance microscopy revealed that thalamic volume in the adult is reduced. In contrast, at postnatal day 4, thalamic volume is normal, suggesting that interactions between cortex and dorsal thalamus postnatally produce the final adult thalamic phenotype. In the Foxg1-cre line maintained on the C57BL/6J background, the radial domain of the cerebral cortex also is disrupted substantially, particularly in supragranular layers. However, neither Foxg1 heterozygous mice of the Foxg1-tet (tetracycline transactivator) line, nor those of the Foxg1-lacZ and Foxg1-cre lines maintained on a mixed background, displayed a reduced cortical thickness. Thus Cre recombinase contributes to the radial phenotype, although only in the context of the congenic C57BL/6J background. These observations highlight an important role for Foxg1 in cortical development, reveal noteworthy complexity in the invocation of specific mechanisms underlying phenotypes expressed following genetic manipulations and stress the importance of including appropriate controls of all genotypes.