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The developing brain undergoes drastic alterations. Here, we investigated developmental changes in the habenula, a brain region that mediates behavioral flexibility during learning, social interactions, and aversive experiences. We showed that developing habenular circuits exhibit multiple alterations that lead to an increase in the structural and functional diversity of cell types, inputs, and functional modules. As the habenula develops, it sequentially transforms into a multisensory brain region that can process visual, olfactory, mechanosensory, and aversive stimuli. Moreover, we observed that the habenular neurons display spatiotemporally structured spontaneous activity that shows prominent alterations and refinement with age. These alterations in habenular activity are accompanied by sequential neurogenesis and the integration of distinct neural clusters across development. Last, we revealed that habenular neurons with distinct functional properties are born sequentially at distinct developmental time windows. Our results highlight a strong link between the functional properties of habenular neurons and their precise birthdate., (Copyright © 2020 The Authors, some rights reserved; exclusive licensee American Association for the Advancement of Science. No claim to original U.S. Government Works. Distributed under a Creative Commons Attribution NonCommercial License 4.0 (CC BY-NC).)