Normal iron homeostasis is vital for healthy development of the CNS and optimal maternal iron stores are essential for providing adequate iron to the developing brain of the fetus. However, an estimated 80% of women have insufficient iron reserves to adequately supply the growing fetus. Numerous reports have found a strong association of even marginal gestational iron deficiency (GID) with impaired cognitive function in the offspring. However, a causal link has remained elusive due to a lack of knowledge regarding the specific molecular mechanisms and cellular targets that are affected by low iron levels in the embryonic CNS. We now provide evidence showing that early GID leads to aberrant Shh signaling in the embryonic brain at a time when interneuron progenitors are born and proliferate. The aberrant Shh signaling in the embryo is preceded by changes in lipid homeostasis, which is important for establishing a proper Shh signaling gradient. The resulting cellular impairments have long lasting persistent consequences for postnatal brain function and are refractory to post-natal iron supplementation. Based on these data we propose the novel hypothesis that GID leads to disruption in brain lipid homeostasis, which consequently alters Shh signaling. This altered Shh signaling leads to changes in neural fate specification and/or proliferation and a disruption of the balance between excitatory and inhibitory neurons in the postnatal cerebral cortex. Considering the highly preserved cellular processes that are affected by GID, we also propose that the observations made in the murine model are relevant for human development. In Aim 1, we will test the hypothesis that disrupted Shh signaling in embryonic brains exposed to GID causes impaired cortical development. In Aim 2 we will test the hypothesis that GID-associated changes in lipid homeostasis are the reasons for the aberrant changes in the Shh signaling domain and inappropriate activation of downstream targets. Aim 3 will test the hypothesis that the impact of GID observed in mouse models is also found in human tissues of comparable developmental stages. To our knowledge these data provide a novel mechanism and novel cellular targets that are affected by GID during embryonic and fetal brain development. The defects we describe provide an explanation of the association of GID with complex cognitive impairments, and our work using human embryonic tissue is the first attempt to translate studies on gestational ID from murine models to humans.