Specification of neuronal fate in the vertebrate central nervous system depends on the profile of transcription factor expression by neural progenitor cells, but the precise roles of such factors in neurogenesis remain poorly characterized. Two closely related transcriptional repressors, Nkx6.2 and Nkx6.1, are expressed by progenitors in overlapping domains of the ventral spinal cord. We provide genetic evidence that differences in the level of repressor activity of these homeodomain proteins underlies the diversification of interneuron subtypes, and provides a fail-safe mechanism during motor neuron generation. A reduction in Nkx6 activity further permits V0 neurons to be generated from progenitors that lack homeodomain proteins normally required for their generation, providing direct evidence for a model in which progenitor homeodomain proteins direct specific cell fates by actively suppressing the expression of transcription factors that direct alternative fates.