The earliest step in creating the cerebral cortex is the specification of neuroepithelium to a cortical fate. Using mouse genetic mosaics and timed inactivations, we demonstrated that Lhx2 acts as a classic selector gene and essential intrinsic determinant of cortical identity. Lhx2 selector activity is restricted to an early critical period when stem cells comprise the cortical neuroepithelium, where it acts cell-autonomously to specify cortical identity and suppress alternative fates in a spatially dependent manner. Laterally, Lhx2 null cells adopt antihem identity, whereas medially they become cortical hem cells, which can induce and organize ectopic hippocampal fields. In addition to providing functional evidence for Lhx2 selector activity, these findings show that the cortical hem is a hippocampal organizer.