Neurons of the dorsal horn integrate and relay sensory information and arise during development in the dorsal spinal cord, the alar plate. Class A and B neurons emerge in the dorsal and ventral alar plate, differ in their dependence on roof plate signals for specification, and settle in the deep and superficial dorsal horn, respectively. We show here that the basic helix-loop-helix (bHLH) gene Olig3 is expressed in progenitor cells that generate class A (dI1-dI3) neurons and that Olig3 is an important factor in the development of these neuronal cell types. In Olig3 mutant mice, the development of class A neurons is impaired; dI1 neurons are generated in reduced numbers, whereas dI2 and dI3 neurons are misspecified and assume the identity of class B neurons. Conversely, Olig3 represses the emergence of class B neurons in the chick spinal cord. We conclude that Olig3 expression distinguishes the two major classes of progenitors in the dorsal spinal cord and determines the distinct specification program of class A neurons.