Astrocytes are the most abundant and functionally diverse glial population in the vertebrate central nervous system (CNS). However, the mechanisms underlying astrocyte specification are poorly understood. It is well established that cellular diversification of neurons in the embryo is generated by position-dependent extrinsic signals and combinatorial interactions of transcription factors that direct specific cell fates by suppressing alternative fates. It is unknown whether a comparable process determines embryonic astrocyte identity. Indeed, astrocyte development is generally thought to take place in a position-independent manner. Here we show multiple functions of Stem cell leukaemia (Scl, also known as Tal1), which encodes a basic helix-loop-helix (bHLH) transcription factor, in the regulation of both astrocyte versus oligodendrocyte cell fate acquisition and V2b versus V2a interneuron cell fate acquisition in the p2 domain of the developing vertebrate spinal cord. Our findings demonstrate a regionally restricted transcriptional programme necessary for astrocyte and V2b interneuron development, with striking parallels to the involvement of SCL in haematopoiesis. They further indicate that acquisition of embryonic glial subtype identity might be regulated by genetic interactions between SCL and the transcription factor Olig2 in the ventral neural tube.