Although it is well established that the ventral telencephalon is the primary source of GABAergic cortical interneurons in rodents, little is known about the specification of specific interneuron subtypes. It is also unclear whether the potential to achieve a given fate is established at their place of origin or by signals received during their migration to or during their maturation within the cerebral cortex. Using both in vivo and in vitro transplantation techniques, we find that two major interneuron subgroups have largely distinct origins within the MGE. Somatostatin (SST)-expressing interneurons are primarily generated within the dorsal MGE, while parvalbumin (PV)-expressing interneurons primarily originate from the ventral MGE. In addition, we show that significant heterogeneity exists between gene expression patterns in the dorsal and ventral MGE. These results suggest that, like the spinal cord, neuronal fate determination in the ventral telencephalon is largely the result of spatially segregated, molecularly distinct microdomains arranged on the dorsal-ventral axis.