The cytokine IL-15 and the inhibitor of DNA binding (Id)2, which negatively regulates the activity of basic helix-loop-helix transcription factors, have been shown to play key roles in NK cell development. Consistent with this, exogenous IL-15 added to human thymic progenitor cells stimulated their development into NK cells at the expense of T cells both in fetal thymic organ culture and in coculture with stromal cells expressing the Notch ligand Delta-like 1. Overexpression of Id2 in thymic progenitor cells stimulated NK cell development and blocked T cell development. This, in part, is attributed to inhibition of the transcriptional activity of the E protein HEB, which we show in this study is the only E protein that enhanced T cell development. Notably, Id2 increased a pool of lineage CD1a-CD5+ progenitor cells that in synergy with IL-15 furthered expansion and differentiation into NK cells. Taken together, our findings point to a dualistic function of Id2 in controlling T/NK cell lineage decisions; T cell development is impaired by Id2, most likely by sequestering HEB, whereas NK cell development is promoted by increasing a pool of CD1a-CD5+ NK cell progenitors, which together with IL-15 differentiate into mature NK cells.