Dopamine receptor DRD1-expressing medium spiny neurons (D1 MSNs) and dopamine receptor DRD2-expressing medium spiny neurons (D2 MSNs) are the principal projection neurons in the striatum, which is divided into dorsal striatum (caudate nucleus and putamen) and ventral striatum (nucleus accumbens and olfactory tubercle). Progenitors of these neurons arise in the lateral ganglionic eminence (LGE). Using conditional deletion, we show that mice lacking the transcription factor genes Sp8 and Sp9 lose virtually all D2 MSNs as a result of reduced neurogenesis in the LGE, whereas D1 MSNs are largely unaffected. SP8 and SP9 together drive expression of the transcription factor Six3 in a spatially restricted domain of the LGE subventricular zone. Conditional deletion of Six3 also prevents the formation of most D2 MSNs, phenocopying the Sp8/9 mutants. Finally, ChIP-Seq reveals that SP9 directly binds to the promoter and a putative enhancer of Six3 Thus, this study defines components of a transcription pathway in a regionally restricted LGE progenitor domain that selectively drives the generation of D2 MSNs.