During development, several populations of progenitor cells in the dorsal telencephalon generate a large variety of neurons which acquire distinct morphologies and physiological properties and serve distinct functions in the mammalian cortex. This paper reviews recent work that has identified (i) key molecules involved in the specification and differentiation of cortical neurons, (ii) novel genes which distinguish distinct subsets of cortical progenitors and may be involved in the diversification of cortical neurons present in different cortical layers, and (iii) mechanisms involved in the generation of different projection neuronal subtypes in the well-studied model of layer 5 of the rodent cortex.