Excitatory projection neurons and inhibitory interneurons primarily accomplish the neural activity of the cerebral cortex, and an imbalance of excitatory-inhibitory neural networks may lead to neuropsychiatric diseases. Gamma-aminobutyric acid (GABA)ergic interneurons mediate inhibition, and the embryonic medial ganglionic eminence (MGE) is a source of GABAergic interneurons. After transplantation, MGE cells migrate to different brain regions, differentiate into multiple subtypes of GABAergic interneurons, integrate into host neural circuits, enhance synaptic inhibition, and have tremendous application value in diseases associated with interneuron disorders. In the current review, we describe the fate of MGE cells derived into specific interneurons and the related diseases caused by interneuron loss or dysfunction and explore the potential of MGE cell transplantation as a cell-based therapy for a variety of interneuron disorder-related diseases, such as epilepsy, schizophrenia, autism spectrum disorder, and Alzheimer's disease.