Mutations in the X-linked MECP2 gene, which encodes the transcriptional regulator methyl-CpG-binding protein 2 (MeCP2), cause Rett syndrome and several neurodevelopmental disorders including cognitive disorders, autism, juvenile-onset schizophrenia and encephalopathy with early lethality. Rett syndrome is characterized by apparently normal early development followed by regression, motor abnormalities, seizures and features of autism, especially stereotyped behaviours. The mechanisms mediating these features are poorly understood. Here we show that mice lacking Mecp2 from GABA (γ-aminobutyric acid)-releasing neurons recapitulate numerous Rett syndrome and autistic features, including repetitive behaviours. Loss of MeCP2 from a subset of forebrain GABAergic neurons also recapitulates many features of Rett syndrome. MeCP2-deficient GABAergic neurons show reduced inhibitory quantal size, consistent with a presynaptic reduction in glutamic acid decarboxylase 1 (Gad1) and glutamic acid decarboxylase 2 (Gad2) levels, and GABA immunoreactivity. These data demonstrate that MeCP2 is critical for normal function of GABA-releasing neurons and that subtle dysfunction of GABAergic neurons contributes to numerous neuropsychiatric phenotypes.