Diverse subsets of cortical interneurons have vital roles in higher-order brain functions. To investigate how this diversity is generated, here we used single-cell RNA sequencing to profile the transcriptomes of mouse cells collected along a developmental time course. Heterogeneity within mitotic progenitors in the ganglionic eminences is driven by a highly conserved maturation trajectory, alongside eminence-specific transcription factor expression that seeds the emergence of later diversity. Upon becoming postmitotic, progenitors diverge and differentiate into transcriptionally distinct states, including an interneuron precursor state. By integrating datasets across developmental time points, we identified shared sources of transcriptomic heterogeneity between adult interneurons and their precursors, and uncovered the embryonic emergence of cardinal interneuron subtypes. Our analysis revealed that the transcription factor Mef2c, which is linked to various neuropsychiatric and neurodevelopmental disorders, delineates early precursors of parvalbumin-expressing neurons, and is essential for their development. These findings shed new light on the molecular diversification of early inhibitory precursors, and identify gene modules that may influence the specification of human interneuron subtypes.