Cortical interneurons (cINs) modulate excitatory neuronal activity by providing local inhibition. During fetal development, several cIN subtypes derive from the medial ganglionic eminence (MGE), a transient ventral telencephalic structure. While altered cIN development contributes to neurodevelopmental disorders, the inaccessibility of human fetal brain tissue during development has hampered efforts to define molecular networks controlling this process. Here, we modified protocols for directed differentiation of human embryonic stem cells, obtaining efficient, accelerated production of MGE-like progenitors and MGE-derived cIN subtypes with the expected electrophysiological properties. We defined transcriptome changes accompanying this process and integrated these data with direct transcriptional targets of NKX2-1, a transcription factor controlling MGE specification. This analysis defined NKX2-1-associated genes with enriched expression during MGE specification and cIN differentiation, including known and previously unreported transcription factor targets with likely roles in MGE specification, and other target classes regulating cIN migration and function. NKX2-1-associated peaks were enriched for consensus binding motifs for NKX2-1, LHX, and SOX transcription factors, suggesting roles in coregulating MGE gene expression. Among the NKX2-1 direct target genes with cIN-enriched expression was CHD2, which encodes a chromatin remodeling protein mutated to cause human epilepsies. Accordingly, CHD2 deficiency impaired cIN specification and altered later electrophysiological function, while CHD2 coassociated with NKX2-1 at cis-regulatory elements and was required for their transactivation by NKX2-1 in MGE-like progenitors. This analysis identified several aspects of gene-regulatory networks underlying human MGE specification and suggested mechanisms by which NKX2-1 acts with chromatin remodeling activities to regulate gene expression programs underlying cIN development.