Invariant natural killer T cells (iNKT cells) are a specific subset of T cells that recognize glycolipid antigens and upon activation rapidly exert effector functions. This unique function is established during iNKT cell development; the detailed mechanisms of this process, however, remain to be elucidated. Here the authors show that deletion of the mediator subunit Med23 in CD4+CD8+ double positive (DP) thymocytes completely blocks iNKT cell development at stage 2. This dysregulation is accompanied by a bias in the expression of genes related to the regulation of transcription and metabolism, and functional impairment of the cells including the loss of NK cell characteristics, reduced ability to secrete cytokines and attenuated recruitment capacity upon activation. Moreover, Med23-deficient iNKT cells exhibit impaired anti-tumor activity. Our study identifies Med23 as an essential transcriptional regulator that controls iNKT cell differentiation and terminal maturation.