The septum is a ventral forebrain structure known to regulate innate behaviors. During embryonic development, septal neurons are produced in multiple proliferative areas from neural progenitors following transcriptional programs that are still largely unknown. Here, we use a combination of single cell RNA sequencing, histology and genetic models to address how septal neuron diversity is established during neurogenesis. We find that the transcriptional profiles of septal progenitors change along neurogenesis, coinciding with the generation of distinct neuron types. We characterize the septal eminence, an anatomically distinct and transient proliferative zone composed of progenitors with distinctive molecular profiles, proliferative capacity and fate potential compared to the rostral septal progenitor zone. We show that Nkx2.1-expressing septal eminence progenitors give rise to neurons belonging to at least three morphological classes, born in temporal cohorts that are distributed across different septal nuclei in a sequential fountain-like pattern. Our study provides insight into the molecular programs that control the sequential production of different neuronal types in the septum, a structure with important roles in regulating mood and motivation.