E2A, HEB, E2–2, and daughterless are basic helix-loop-helix (bHLH) proteins that play key roles in multiple developmental pathways. The DNA binding activity of E2A, HEB, and E2-2 is regulated by a distinct class of inhibitor HLH proteins, the Id gene products. Here, we show that Id3 is required for major histocompatability (MHC) class I– and class II–restricted thymocyte positive selection. Additionally, H-Y TCR–mediated negative selection is severely perturbed in Id3 null mutant mice. Finally, we show that E2A and Id3 interact genetically to regulate thymocyte development. These observations identify the HLH inhibitory protein Id3 as an essential component required for proper thymocyte maturation.