Defects in GABAergic function can cause epilepsy. In the last years, cell-based therapies have attempted to correct these defects with disparate success on animal models of epilepsy. Recently, we demonstrated that medial ganglionic eminence (MGE)-derived cells grafted into the neonatal normal brain migrate and differentiate into functional mature GABAergic interneurons. These cells are able to modulate the local level of GABA-mediated synaptic inhibition, which suggests their suitability for cell-based therapies. However, it is unclear whether they can integrate in the host circuitry and rescue the loss of inhibition in pathological conditions. Thus, as proof of principle, we grafted MGE-derived cells into a mouse model of seizure susceptibility caused by specific elimination of GABAergic interneuron subpopulations in the mouse hippocampus after injection of the neurotoxic saporin conjugated to substance P (SSP-Sap). This ablation was associated with significant decrease in inhibitory postsynaptic currents (IPSC) on CA1 pyramidal cells and increased seizure susceptibility induced by pentylenetetrazol (PTZ). Grafting of GFP(+) MGE-derived cells in SSP-Sap-treated mice repopulates the hippocampal ablated zone with cells expressing molecular markers of mature interneurons. Interestingly, IPSC kinetics on CA1 pyramidal cells of ablated hippocampus significantly increased after transplantation, reaching levels similar to the normal mice. More importantly, this was associated with reduction in seizure severity and decrease in postseizure mortality induced by PTZ. Our data show that MGE-derived cells fulfill most of the requirements for an appropriate cell-based therapy, and indicate their suitability for neurological conditions where a modulation of synaptic inhibition is needed, such as epilepsy.