Patterning centers that produce gradients of morphogenetic molecules, including fibroblast growth factor (FGF), bone morphogenetic proteins (BMP), Wnt, Sonic hedgehog (Shh), and retinoic acid (RA), are located in telencephalic anlage during early stages of development. Genetic evidence based on loss-of-function and gain-of-function studies indicate that they are involved in regional specification of the dorsal, ventral, and lateral telencephalon. For patterning of the dorsal telencephalon, FGF8 controls the anteroposterior patterning, while BMP and Wnt molecules regulate the mediolateral patterning. Shh and retinoic acid regulate patterning of the ventral and the lateral telencephalon. The regionalization of telencephalon is accompanied by expression of region-specific codes of transcription factors, which in turn regulate different phases of neuronal development to generate different cell types in each brain region. Therefore, bioactive signals of morphogenetic molecules are translated into transcription factor codes for regional specification, which subsequently leads to neurogenesis of the diversity of cell types in different regions of the telencephalon.