Innate immune cells are found in the thymus and have been thought to arise from bone marrow progenitors but definitive evidence of this origin has been lacking. By examining T cell factor 1 (TCF-1), a transcription factor critical for the development of both adaptive T cells and innate lymphoid cells (ILC), we uncover alternate origins for thymic NK cells and ILC1. Surprisingly, while the development of all ILC subsets, including NK cells, is blocked in the absence of TCF-1 in the bone marrow, NK cell numbers are normal in peripheral tissues. We found that TCF-1 acted in thymic progenitors to limit the expression of NK cell signature genes normally allowing the formation of T cells. Instead, ILC1 arise from bone marrow progenitors. We demonstrate that TCF-1 globally regulates chromatin accessibility which significantly impacts the suppression of genes critical for determining the fate in thymic precursor cells. Derepression of this thymic checkpoint resulted in the development of thymic-derived NK cells that reconstitute the entire peripheral compartment to prevent tumour establishment. Collectively, our data reveal the pivotal role of TCF-1 in the thymus as a molecular switch to suppress alternative fates allowing T cell development and restricting NK cell development.