Generating a balanced network of inhibitory and excitatory neurons during development requires precise transcriptional control. In the dorsal spinal cord, Ptf1a, a basic helix-loop-helix (bHLH) transcription activator, maintains this delicate balance by inducing homeodomain (HD) transcription factors such as Pax2 to specify the inhibitory lineage while suppressing HD factors such as Tlx1/3 that specify the excitatory lineage. We uncover the mechanism by which Ptf1a represses excitatory cell fate in the inhibitory lineage. We identify Prdm13 as a direct target of Ptf1a and reveal that Prdm13 actively represses excitatory cell fate by binding to regulatory sequences near the Tlx1 and Tlx3 genes to silence their expression. Prdm13 acts through multiple mechanisms, including interactions with the bHLH factor Ascl1, to repress Ascl1 activation of Tlx3. Thus, Prdm13 is a key component of a highly coordinated transcriptional network that determines the balance of inhibitory versus excitatory neurons in the dorsal spinal cord.