Spinal motor neurons and oligodendrocytes are generated sequentially from a common pool of progenitors termed pMN cells. Olig2 is a bHLH-class transcription factor in pMN cells, but it has remained unclear how its transcriptional activity is modulated to first produce motor neurons and then oligodendrocytes. Previous studies have shown that Olig2 primes pMN cells to become motor neurons by triggering the expression of Ngn2 and Lhx3. Here we show that Olig2 also antagonizes the premature expression of post-mitotic motor neuron genes in pMN cells. This blockade is counteracted by Ngn2, which accumulates heterogeneously in pMN cells, thereby releasing a subset of the progenitors to differentiate and activate expression of post-mitotic motor neuron genes. The antagonistic relationship between Ngn2 and Olig2 is mediated by protein interactions that squelch activity as well as competition for shared DNA-binding sites. Our data support a model in which the Olig2/Ngn2 ratio in progenitor cells serves as a gate for timing proper gene expression during the development of pMN cells: Olig2(high) maintains the pMN state, thereby holding cells in reserve for oligodendrocyte generation, whereas Ngn2(high) favors the conversion of pMN cells into post-mitotic motor neurons.