Olig2, a basic helix-loop-helix (bHLH) transcription factor, is expressed in a restricted domain of the spinal cord ventricular zone that sequentially generates motoneurons and oligodendrocytes. Just prior to oligo-dendrocyte precursor formation, the domains of Olig2 and Nkx2.2 expression switch from being mutually exclusive to overlapping, and Neurogenins1 and 2 are extinguished within this region. Coexpression of Olig2 with Nkx2.2 in the spinal cord promotes ectopic and precocious oligodendrocyte differentiation. Both proteins function as transcriptional repressors in this assay. This effect is blocked by forced expression of Neurogenin1. By contrast, misexpression of Olig2 alone derepresses Neurogenins and promotes motoneuron differentiation. Olig2 therefore functions sequentially in motoneuron and oligodendrocyte fate specification. This dual action is enabled by spatio-temporal changes in the expression domains of other transcription factors with which Olig2 functionally interacts.