Notch proteins are cell surface receptors that mediate developmental cell specification events. To explore the function of murine Notch1, an essential portion of the gene was flanked with loxP sites and inactivation induced via interferon-regulated Cre recombinase. Mice with a neonatally induced loss of Notch1 function were transiently growth retarded and had a severe deficiency in thymocyte development. Competitive repopulation of lethally irradiated wild-type hosts with wild-type- and Notch1-deficient bone marrow revealed a cell autonomous blockage in T cell development at an early stage, before expression of T cell lineage markers. Notch1-deficient bone marrow did, however, contribute normally to all other hematopoietic lineages. These findings suggest that Notch1 plays an obligatory and selective role in T cell lineage induction.