The Lower Rhombic Lip (LRL) is a transient neuroepithelial structure of the dorsal hindbrain, which expands from r2 to r7, and gives rise to deep nuclei of the brainstem, such as the vestibular and auditory nuclei and most posteriorly the precerebellar nuclei. Although there is information about the contribution of specific proneural-progenitor populations to specific deep nuclei, and the distinct rhombomeric contribution, little is known about how progenitor cells from the LRL behave during neurogenesis and how their transition into differentiation is regulated. In this work, we investigated the atoh1 gene regulatory network operating in the specification of LRL cells, and the kinetics of cell proliferation and behavior of atoh1a-derivatives by using complementary strategies in the zebrafish embryo. We unveiled that atoh1a is necessary and sufficient for specification of LRL cells by activating atoh1b, which worked as a differentiation gene to transition progenitor cells towards neuron differentiation in a Notch-dependent manner. This cell state transition involved the release of atoh1a-derivatives from the LRL: atoh1a progenitors contributed first to atoh1b cells, which are committed non-proliferative precursors, and to the lhx2b-neuronal lineage as demonstrated by cell fate studies and functional analyses. Using in vivo cell lineage approaches we revealed that the proliferative cell capacity, as well as the mode of division, relied on the position of the atoh1a progenitors within the dorsoventral axis. We showed that atoh1a may behave as the cell fate selector gene, whereas atoh1b functions as a neuronal differentiation gene, contributing to the lhx2b neuronal population. atoh1a-progenitor cell dynamics (cell proliferation, cell differentiation, and neuronal migration) relies on their position, demonstrating the challenges that progenitor cells face in computing positional information from a dynamic two-dimensional grid in order to generate the stereotyped neuronal structures in the embryonic hindbrain.