The hypothalamus is a key integrative center in the brain that consists of diverse cell types required for a variety of functions including homeostasis, reproduction, stress response, social and cognitive behavior. Despite our knowledge of several transcription factors crucial for hypothalamic development, it is not known how the wide diversity of neuron types in the hypothalamus is produced. In particular, almost nothing is known about the mechanisms that specify neurons in the posteriormost part of the hypothalamus, the mammillary area. Here, we investigated the specification of two distinct neuron types in the mammillary area that produce the hypothalamic hormones Vasoactive intestinal peptide (Vip) and Urotensin 1 (Uts1). We show that Vip- and Uts1-positive neurons develop in distinct domains in the mammillary area defined by the differential expression of the transcription factors Fezf2, Otp, Sim1a and Foxb1.2. Coordinated activities of these factors are crucial for the establishment of the mammillary area subdomains and the specification of Vip- and Uts1-positive neurons. In addition, Fezf2 is important for early development of the posterior hypothalamus. Thus, our study provides the first molecular anatomical map of the posterior hypothalamus in zebrafish and identifies, for the first time, molecular requirements underlying the specification of distinct posterior hypothalamic neuron types.