Mtg16/Eto2 is a transcriptional corepressor that is disrupted by t(16;21) in acute myeloid leukemia. Using mice lacking Mtg16, we found that Mtg16 is a critical regulator of T-cell development. Deletion of Mtg16 led to reduced thymocyte development in vivo, and after competitive bone marrow transplantation, there was a nearly complete failure of Mtg16(-/-) cells to contribute to thymocyte development. This defect was recapitulated in vitro as Mtg16(-/-) Lineage(-)/Sca1(+)/c-Kit(+) (LSK) cells of the bone marrow or DN1 cells of the thymus failed to produce CD4(+)/CD8(+) cells in response to a Notch signal. Complementation of these defects by reexpressing Mtg16 showed that 3 highly conserved domains were somewhat dispensable for T-cell development but required the capacity of Mtg16 to suppress E2A-dependent transcriptional activation and to bind to the Notch intracellular domain. Thus, Mtg16 integrates the activities of signaling pathways and nuclear factors in the establishment of T-cell fate specification.