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GABAergic inhibition plays an important role in the establishment and maintenance of cortical circuits during development. Neuregulin 1 (Nrg1) and its interneuron-specific receptor ErbB4 are key elements of a signaling pathway critical for the maturation and proper synaptic connectivity of interneurons. Using conditional deletions of the ERBB4gene in mice, we tested the role of this signaling pathway at two developmental timepoints in parvalbumin-expressing (PV) interneurons, the largest subpopulation of cortical GABAergic cells. Loss of ErbB4 in PV interneurons during embryonic, but not late postnatal development leads to alterations in the activity of excitatory and inhibitory cortical neurons, along with severe disruption of cortical temporal organization. These impairments emerge by the end of the second postnatal week, prior to the complete maturation of the PV interneurons themselves. Early loss of ErbB4 in PV interneurons also results in profound dysregulation of excitatory pyramidal neuron dendritic architecture and a redistribution of spine density at the apical dendritic tuft. In association with these deficits, excitatory cortical neurons exhibit normal tuning for sensory inputs, but a loss of state-dependent modulation of the gain of sensory responses. Together these data support a key role for early developmental Nrg1/ErbB4 signaling in PV interneurons as a powerful mechanism underlying the maturation of both the inhibitory and excitatory components of cortical circuits.