During mouse development, the ventral spinal cord becomes organized into five progenitor domains that express different combinations of transcription factors and generate different subsets of neurons and glia. One of these domains, known as the p2 domain, generates two subtypes of interneurons, V2a and V2b. Here we have used genetic fate mapping and loss-of-function analysis to show that the transcription factor Sox1 is expressed in, and is required for, a third type of p2-derived interneuron, which we named V2c. These are close relatives of V2b interneurons, and, in the absence of Sox1, they switch to the V2b fate. In addition, we show that late-born V2a and V2b interneurons are heterogeneous, and subsets of these cells express the transcription factor Pax6. Our data demonstrate that interneuron diversification in the p2 domain is more complex than previously thought and directly implicate Sox1 in this process.