Notch1 signaling is required for T cell development. We have previously demonstrated that expression of a dominant active Notch1 (ICN1) transgene in hematopoietic stem cells (HSCs) leads to thymic-independent development of CD4⁺CD8⁺ double-positive (DP) T cells in the bone marrow (BM). To understand the function of Notch1 in early stages of T cell development, we assessed the ability of ICN1 to induce extrathymic T lineage commitment in BM progenitors from mice that varied in their capacity to form a functional pre-T cell receptor (TCR). Whereas mice repopulated with ICN1 transduced HSCs from either recombinase deficient (Rag-2^−/−) or Src homology 2 domain–containing leukocyte protein of 76 kD (SLP-76)^−/− mice failed to develop DP BM cells, recipients of ICN1-transduced Rag-2^−/− progenitors contained two novel BM cell populations indicative of pre-DP T cell development. These novel BM populations are characterized by their expression of CD3ε and pre-Tα mRNA and the surface proteins CD44 and CD25. In contrast, complementation of Rag-2^−/− mice with a TCRβ transgene restored ICN1-induced DP development in the BM within 3 wk after BM transfer (BMT). At later time points, this population selectively and consistently gave rise to T cell leukemia. These findings demonstrate that Notch signaling directs T lineage commitment from multipotent progenitor cells; however, both expansion and leukemic transformation of this population are dependent on T cell–specific signals associated with development of DP thymocytes.