During brain development, many factors influence the assembly and final positioning of cortical neurons, and this process is essential for proper circuit formation and normal brain function. Among many important extrinsic factors that guide the maturation of embryonic cortical neurons, the secreted neurotransmitter GABA has been proposed to influence both their migratory behaviour and their terminal differentiation. The full extent of the short-term and long-term changes in brain patterning and function caused by modulators of the GABA system is not known. In this study, we specifically investigated whether diazepam, a commonly used benzodiazepine that modulates the GABAA receptor, alters neuronal positioning in vivo, and whether this can lead to lasting effects on brain function. We found that fetal exposure to diazepam did not change cell positioning within the embryonic day (E)14.5 mouse cerebral cortex, but significantly altered neuron positioning within the E18.5 cortex. In adult mice, diazepam treatment affected the distribution of cortical interneurons that express parvalbumin or calretinin, and also led to a decrease in the numbers of calretinin-expressing interneurons. In addition, we observed that neonatal exposure to diazepam altered the sensitivity of mice to a proconvulsant challenge. Therefore, exposure of the fetal brain to benzodiazepines has consequences for the positioning of neurons and cortical network excitability.