Pathogenic mutation of the zinc-finger transcription factor ZNF292 is a recently defined contributor to human neurodevelopmental disorders (NDDs). However, the gene's roles in cortical development and regulatory networks under its control were previously undefined. Here, human stem cell models of ZNF292 deficiency, resembling pathogenic haploinsufficiency, are used to derive cortical inhibitory neuron progenitors and neurons. ZNF292-deficient progenitors undergo precocious differentiation but subsequently exhibit compromised interneuron maturation and function. In progenitors, genome-wide occupancy and transcriptomic analyses identify direct target genes controlling neuronal differentiation and synapse formation that are upregulated upon ZNF292 deficiency. By contrast, deficiency in interneurons compromises ZNF292 genome-wide association with and causes downregulation of direct target genes promoting interneuron maturation and function, including other NDD genes. ZNF292-deficient interneurons also exhibit altered channel activities, elevated GABA responsiveness, and hallmarks of neuronal hyperactivity. Together, the results of this work define neurodevelopmental requirements for ZNF292, some of which may contribute to pathogenic ZNF292 mutation-related NDDs.