Summary Diverse subsets of cortical interneurons play vital roles in higher-order brain functions. To investigate how this diversity is generated, we used single cell RNA-seq to profile the transcriptomes of murine cells collected along a developmental timecourse. Heterogeneity within mitotic progenitors in the ganglionic eminences is driven by a highly conserved maturation trajectory, alongside eminence-specific transcription factor expression that seeds the emergence of later diversity. Upon becoming postmitotic, progenitors diverge and differentiate into transcriptionally distinct states, including an interneuron precursor state. By integrating datasets across developmental timepoints, we identified shared sources of transcriptomic heterogeneity between adult interneurons and their precursors, revealing the embryonic emergence of interneuron cardinal subtypes. Our analysis revealed that the ASD-associated transcription factor Mef2c delineates early Pvalb-precursors, and is essential for their development. These findings shed new light on the molecular diversification of early inhibitory precursors, and identify gene modules that may influence the specification of human subtypes.