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TCF1 plays a critical role in T lineage commitment and the development of alpha beta lineage T cells, but its role in gamma delta T cell development remains poorly understood. Here, we reveal a regulatory axis where T cell receptor (TCR) signaling controls TCF1 expression through an E-protein-bound regulatory element in the Tcf7 locus, and this axis regulates both gamma delta T lineage commitment and effector fate. Indeed, the level of TCF1 expression plays an important role in setting the threshold for gamma delta T lineage commitment and modulates the ability of TCR signaling to influence effector fate adoption by gamma delta T lineage progenitors. This finding provides mechanistic insight into how TCR-mediated repression of E proteins promotes the development of gamma delta T cells and their adoption of the interleukin (IL)-17-producing effector fate. IL-17-producing gamma delta T cells have been implicated in cancer progression and in the pathogenesis of psoriasis and multiple sclerosis.