FoxG1 is a conserved transcriptional repressor that plays a key role in the specification, proliferation and differentiation of the telencephalon, and is expressed from the earliest stages of telencephalic development through to the adult. How the interaction with co-factors might influence the multiplicity and diversity of FoxG1 function is not known. Here, we show that interaction of FoxG1 with TLE2, a Xenopus tropicalis co-repressor of the Groucho/TLE family, is crucial for regulating the early activity of FoxG1. We show that TLE2 is co-expressed with FoxG1 in the ventral telencephalon from the early neural plate stage and functionally cooperates with FoxG1 in an ectopic neurogenesis assay. FoxG1 has two potential TLE binding sites: an N-terminal eh1 motif and a C-terminal YWPMSPF motif. Although direct binding seems to be mediated by the N-terminal motif, both motifs appear important for functional synergism. In the neurogenesis assay, mutation of either motif abolishes functional cooperation of TLE2 with FoxG1, whereas in the forebrain deletion of both motifs renders FoxG1 unable to induce the ventral telencephalic marker Nkx2.1. Knocking down either FoxG1 or TLE2 disrupts the development of the ventral telencephalon, supporting the idea that endogenous TLE2 and FoxG1 work together to specify the ventral telencephalon.