Glioblastoma 3 (Gli3) is a transcription factor involved in patterning and oncogenesis. Here, we demonstrate a role for Gli3 in thymocyte development. Gli3 is differentially expressed in fetal CD4^–CD8^– double-negative (DN) thymocytes and is most highly expressed at the CD44⁺ CD25^– DN (DN1) and CD44–CD25^– (DN4) stages of development but was not detected in adult thymocytes. Analysis of null mutants showed that Gli3 is involved at the transitions from DN1 to CD44⁺ CD25⁺ DN (DN2) cell and from DN to CD4⁺CD8⁺ double-positive (DP) cell. Gli3 is required for differentiation from DN to DP thymocyte, after pre–T-cell receptor (TCR) signaling but is not necessary for pre-TCR–induced proliferation or survival. The effect of Gli3 was dose dependent, suggesting its direct involvement in the transcriptional regulation of genes controlling T-cell differentiation during fetal development.