Innate lymphoid cells (ILCs) including lymphoid tissue-inducer (LTi) cells, IL-22-producing NKp46+ innate cells and IL-13-producing nuocytes play important roles in regulating intestinal microbiota, defence against pathogens and formation of lymphoid tissue1-4. Their development is dependent on Id2 and Rorγt or Rorα5-7. Lineage tracing experiments have shown that the common lymphoid precursor gives rise to nuocytes, LTi cells and NKp46+ ILCs6,8,9, but these studies have not deciphered the discrete steps and transcription factors that specify ILC subset development, activation and maintenance. Whether NKp46+ ILCs arise directly from LTi cells, or rather represent a separate lineage that diverges earlier in development, remains controversial10-12. We investigated the requirement for the transcriptional master regulator T-bet (encoded by Tbx21) which is critical for the development of both T cells and NK cells13,14, in driving differentiation of ILC populations. Here we report that T-bet played an essential role for the development of NKp46+ ILCs, but was dispensable for LTi cells or nuocytes. Tbx21+/+ LTi cells adopted an NKp46+ phenotype in vitro and in vivo but not in the absence of Tbx21. Decrease of T-bet expression coordinately reduced Notch1 and Notch2 and we show Notch signaling is necessary for the transition of LTi cells into NKp46+ ILCs. In addition, Tbx21−/− mice have an accumulation in CD4− LTi cells and differentiation into NKp46+ ILCs came solely from this population. Our results pinpoint T-bet as the critical regulator of NKp46+ ILC differentiation by regulation of Notch2 signaling. NKp46+ cells are an important element of the protective intestinal mucosal cellular arsenal, and here, we uncover the distinct molecular pathways that guide the development of NKp46+ ILCs.