Transcription factors with gradients of expression in neocortical progenitors give rise to distinct motor and sensory cortical areas by controlling the area-specific differentiation of distinct neuronal subtypes. However, the molecular mechanisms underlying this area-restricted control are still unclear. Here, we show that COUP-TFI controls the timing of birth and specification of corticospinal motor neurons (CSMN) in somatosensory cortex via repression of a CSMN differentiation program. Loss of COUP-TFI function causes an area-specific premature generation of neurons with cardinal features of CSMN, which project to subcerebral structures, including the spinal cord. Concurrently, genuine CSMN differentiate imprecisely and do not project beyond the pons, together resulting in impaired skilled motor function in adult mice with cortical COUP-TFI loss-of-function. Our findings indicate that COUP-TFI exerts critical areal and temporal control over the precise differentiation of CSMN during corticogenesis, thereby enabling the area-specific functional features of motor and sensory areas to arise.