Dorsal horn neurons express many different neuropeptides that modulate sensory perception like the sensation of pain. Inhibitory neurons of the dorsal horn derive from postmitotic neurons that express Pax2, Lbx1 and Lhx1/5, and diversify during maturation. In particular, fractions of maturing inhibitory neurons express various neuropeptides. We demonstrate here that a coordinate molecular mechanism determines inhibitory and peptidergic fate in the developing dorsal horn. A bHLH factor complex that contains Ptf1a acts as upstream regulator and initiates the expression of several downstream transcription factors in the future inhibitory neurons, of which Pax2 is known to determine the neurotransmitter phenotype. We demonstrate here that dynorphin, galanin, NPY, nociceptin and enkephalin expression depends on Ptf1a, indicating that these neuropeptides are expressed in inhibitory neurons. Furthermore, we show that Neurod1/2/6 and Lhx1/5, which act downstream of Ptf1a, control distinct aspects of peptidergic differentiation. In particular, the Neurod1/2/6 factors are essential for dynorphin and galanin expression, whereas the Lhx1/5 factors are essential for NPY expression. We conclude that a transcriptional network operates in maturing dorsal horn neurons that coordinately determines transmitter and peptidergic fate.