Recent studies have identified a number of transcriptional regulators, including E proteins, EBF1, FOXO1, and PAX5, that act together to orchestrate the B-cell fate. However, it still remains unclear as to how they are linked at the earliest stages of B-cell development. Here, we show that lymphocyte development in HEB-ablated mice exhibits a partial developmental arrest, whereas B-cell development in E2A ^+/− HEB ^−/− mice is completely blocked at the LY6D ⁻ common lymphoid progenitor stage. We show that the transcription signatures of E2A- and HEB-ablated common lymphoid progenitors significantly overlap. Notably, we found that Foxo1 expression was substantially reduced in the LY6D ⁻ HEB- and E2A-deficient cells. Finally, we show that E2A binds to enhancer elements across the FOXO1 locus to activate Foxo1 expression, linking E2A and FOXO1 directly in a common pathway. In summary, the data indicate that the earliest event in B-cell specification involves the induction of FOXO1 expression and requires the combined activities of E2A and HEB.