Lymphoid tissue development is initiated during embryogenesis by the migration of lymphoid tissue inducer (LTi) cells from the fetal liver to the periphery, where they induce the formation of lymph nodes and Peyer’s patches. In the fetal liver, a subset of common lymphoid progenitors (CLPs) that expresses the integrin α4β7 gives rise to LTi cells, a process strictly dependent on the expression of the transcriptional repressor Id2 and the nuclear hormone receptor retinoic acid–related orphan receptor γ t (RORγt). In this study, we show that Id2 and RORγt are sequentially up-regulated during LTi cell development, matching two waves of differentiation with opposite requirements for Notch signaling. Both the expression of Id2 and Notch are required for the generation of α4β7⁺ RORγt⁻ fetal progenitors, but Notch subsequently blocks progression to the RORγt⁺ stage and final maturation of LTi cells. Notch is therefore a necessary switch to engage the LTi developmental pathway, but needs to be turned off later to avoid diversion to the T cell fate.