Notch1 signaling drives T cell development at the expense of B cell development from a common precursor, an effect that is dependent on a C-terminal Notch1 transcriptional activation domain. The function of Deltex1, initially identified as a positive modulator of Notch function in a genetic screen in Drosophila, is poorly understood. We now demonstrate that, in contrast to Notch1, enforced expression of Deltex1 in hematopoietic progenitors results in B cell development at the expense of T cell development in fetal thymic organ culture and in vivo. Consistent with these effects, Deltex1 antagonizes Notch1 signaling in transcriptional reporter assays by inhibiting coactivator recruitment. These data suggest that a balance of inductive Notch1 signals and inhibitory signals mediated through Deltex1 and other modulators regulate T-B lineage commitment.