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The master transcription factor PAX6 is highly expressed by progenitors in the developing rostrolateral cortex to regulate the production of excitatory glutamatergic neurons. Previous studies in Pax6-null mouse cortex reported that a proportion of cortical cells re-specify into an aberrant fate, expressing genes associated with the ventral telencephalon, where GABAergic neurons are specified. We hypothesized that the increased cell fate heterogeneity in Pax6-null cortical cells is dependent on the regional morphogens in the developing cortex. Single-cell RNA sequencing on control cortex at E13 and E14 unveiled transcriptomic landscapes that follow the differentiation program from radial glial progenitors intermediate progenitors glutamatergic neurons. In Pax6-cKO cortex, the differentiation program was perturbed by the emergence of two aberrant cell fates, namely the ectopic GABAergic cells (eGCs) in the lateral cortex and the dorsomedial-like cells (DMLC) in the midline at the expense of intermediate progenitors and superficial layer neurons. Differential gene expression analysis revealed that SHH and BMP signalling underlie regional aberrant cell fates in Pax6-cKO cortex. To validate SHH's roles in aberrant fate specifications, we attenuated SHH availability by removing the ventral telencephalon from the telencephalic explants thereby preventing GABAergic interneurons bearing SHH from migrating into the cortex. In the absence of ventral telencephalon, the numbers of eGCs expressing the GABAergic gene Gsx2 in Pax6-cKO cortex were significantly reduced when compared to intact telencephalic hemisphere. We also treated Pax6-cKO telencephalic explants with BMP4 to suppress SHH signalling. Upon BMP induction, Gsx2 expression was abolished in the lateral cortex, while Prdm13 indicative of a DMLC fate was maintained in Pax6-cKO cortex. Altogether, we suggest that PAX6 safeguards cortical excitatory neuronal fate by preventing cortical progenitors from responding inappropriately to regional morphogens.