Here we review the mechanisms that determine projection neuron identity during cortical development. Pyramidal neurons in the mammalian cerebral cortex can be classified into two major classes: corticocortical projection neurons, which are concentrated in the upper layers of the cortex, and subcortical projection neurons, which are found in the deep layers. Early progenitor cells in the ventricular zone produce deep layer neurons that express transcription factors including Sox5, Fezf2, and Ctip2, which play important roles in the specification of subcortically projecting axons. Upper layer neurons are produced from progenitors in the subventricular zone, and the expression of Satb2 in these differentiating neurons is required for the formation of axonal projections that connect the two cerebral hemispheres. The Fezf2/Ctip2 and Satb2 pathways appear to be mutually repressive, thus ensuring that individual neurons adopt either a subcortical or callosal projection neuron identity at early times during development. The molecular mechanisms by which Satb2 regulates gene expression involves long-term epigenetic changes in chromatin configuration, which may enable cell fate decisions to be maintained during development.