Gestational iron deficiency (gID) is highly prevalent and associated with an increased risk of intellectual and developmental disabilities in affected individuals that are often defined by a disrupted balance of excitation and inhibition (E/I) in the brain. Using a nutritional mouse model of gID, we previously demonstrated a shift in the E/I balance towards increased inhibition in the brains of gID offspring that was refractory to postnatal iron supplementation. We thus tested whether gID affects embryonic progenitor cells that are fated towards inhibitory interneurons. We quantified relevant cell populations during embryonic inhibitory neuron specification and found an increase in the proliferation of Nkx2.1+ interneuron progenitors in the embryonic medial ganglionic eminence at E14 that was associated with increased Shh signaling in gID animals at E12. When we quantified the number of mature inhibitory interneurons that are known to originate from the MGE, we found a persistent disruption of differentiated interneuron subtypes in early adulthood. Our data identify a cellular target that links gID with a disruption of cortical interneurons which play a major role in the establishment of the E/I balance.