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Although canonical Notch signaling regulates multiple hematopoietic lineage decisions including T cell and marginal zone B cell fate specification, the downstream molecular mediators of Notch function are largely unknown. We showed here that conditional inactivation of Hes1, a well-characterized Notch target gene, in adult murine bone marrow (BM) cells severely impaired T cell development without affecting other Notch-dependent hematopoietic lineages such as marginal zone B cells. Competitive mixed BM chimeras, intrathymic transfer experiments, and in vitro culture of BM progenitors on Delta-like-expressing stromal cells further demonstrated that Hes1 is required for T cell lineage commitment, but dispensable for Notch-dependent thymocyte maturation through and beyond the beta selection checkpoint. Furthermore, our data strongly suggest that Hes1 is essential for the development and maintenance of Notch-induced T cell acute lymphoblastic leukemia. Collectively, our studies identify Hes1 as a critical but context-dependent mediator of canonical Notch signaling in the hematopoietic system.