Abnormal cortical circuits underlie some cognitive and psychiatric disorders, yet the molecular signals that generate normal cortical networks remain poorly understood. Semaphorin 7A (Sema7A) is an atypical member of the semaphorin family that is GPI-linked, expressed principally postnatally, and enriched in sensory cortex. Significantly, SEMA7A is deleted in individuals with 15q24 microdeletion syndrome, characterized by developmental delay, autism, and sensory perceptual deficits. We studied the role that Sema7A plays in establishing functional cortical circuitry in mouse somatosensory barrel cortex. We found that Sema7A is expressed in spiny stellate cells and GABAergic interneurons and that its absence disrupts barrel cytoarchitecture, reduces asymmetrical orientation of spiny stellate cell dendrites, and functionally impairs thalamocortically evoked synaptic responses, with reduced feed-forward GABAergic inhibition. These data identify Sema7A as a regulator of thalamocortical and local circuit development in layer 4 and provide a molecular handle that can be used to explore the coordinated generation of excitatory and inhibitory cortical circuits.