Midbrain dopamine neurons (mDA) are important regulators of diverse physiological functions, including movement, attention, and reward behaviors. Accordingly, aberrant function of dopamine neurons underlies a wide spectrum of disorders, such as Parkinson's disease (PD), dystonia, and schizophrenia. The distinct functions of the dopamine system are carried out by neuroanatomically discrete subgroups of dopamine neurons, which differ in gene expression, axonal projections, and susceptibility in PD. The developmental underpinnings of this heterogeneity are undefined. We have recently shown that in the embryonic CNS, mDA originate from the midbrain floor plate, a ventral midline structure that is operationally defined by the expression of the molecule Shh. Here, we develop these findings to reveal that in the embryonic midbrain, the spatiotemporally dynamic Shh domain defines multiple progenitor pools. We deduce 3 distinct progenitor pools, medial, intermediate, and lateral, which contribute to different mDA clusters. The earliest progenitors to express Shh, here referred to as the medial pool, contributes neurons to the rostral linear nucleus and mDA of the ventral tegmental area/interfascicular regions, but remarkably, little to the substantia nigra pars compacta. The intermediate Shh+ progenitors give rise to neurons of all dopaminergic nuclei, including the SNpc. The last and lateral pool of Shh+ progenitors generates a cohort that populates the red nucleus, Edinger Westphal nucleus, and supraoculomotor nucleus and cap. Subsequently, these lateral Shh+ progenitors produce mDA. This refined ontogenetic definition will expand understanding of dopamine neuron biology and selective susceptibility, and will impact stem cell-derived therapies and models for PD.