GABAergic interneurons are key inhibitory regulators of cortical circuit function. Among the dozens of reported transcriptionally distinct types of cortical interneurons, neurogliaform cells (NGCs) are unique: they are the primary source of ‘slow’ cortical inhibition and are recruited by long-range excitatory inputs. Despite their functional importance, the developmental emergence and cellular diversity within this cell type remain unclear. Here, combining single- cell transcriptomics, genetic fate-mapping, electrophysiological characterization and morphological reconstruction, we show that discrete molecular subtypes of NGCs emerge from a common progenitor domain in the embryonic preoptic area (POA). Moreover, using in-utero electroporation, we show that the different NGC subtypes are generated in the POA at E14.5. By reconstructing NGC molecular architecture across development, we demonstrate that newborn NGCs and their postnatal progeny harbor shared molecular features and that the transcription factor Tox2 constitutes an identity hallmark for the different members of the NGC family. Subsequently, using CRISPR-mediated genetic loss-of-function, we reveal that the transcription factor Tox2 is critical for the development of these cells: POA-born cells lacking Tox2 fail to differentiate into NGCs. Together, these results indicate that the different NGC subtypes are born from a spatially restricted pool of POA progenitors, after which subtype signatures are gradually acquired through development via diverging molecular programs and reach a stabilization plateau at early postnatal stages.