Despite clear physiological roles, the ventromedial hypothalamus (VMH) developmental programs are poorly understood. Here, we asked whether the proneural gene, Achaete-scute homolog1 (Ascl1), contributes to VMH development. Ascl1 transcripts were detected in E10.5-P0 VMH neural progenitors. The elimination of Ascl1 reduced the number of VMH neurons at E12.5 and E15.5, particularly within the VMH-central (VMHC) and -dorsomedial (VMHDM) subdomains and resulted in a VMH cell fate change from glutamatergic to GABAergic. We observed a loss of Neurog3 expression in Ascl1−/− hypothalamic progenitors and an upregulation of Neurog3 when Ascl1 was overexpressed. We also demonstrated a glutamatergic to GABAergic fate switch in Neurog3-null mutant mice, suggesting that Ascl1 might act via Neurog3 to drive VMH cell fate decisions. We also showed a concomitant increase in the central GABAergic fate determinant Dlx1/2 expression in the Ascl1-null hypothalamus. However, Ascl1 was not sufficient to induce an ectopic VMH fate when overexpressed outside of the normal window of competency. Combined, Ascl1 is required but not sufficient to specify the neurotransmitter identity of VMH neurons, acting in a transcriptional cascade with Neurog3.