The differentiation of activated CD4(+) T cells into the T helper type 1 (T(H)1) or T(H)2 fate is regulated by cytokines and the transcription factors T-bet and GATA-3. Whereas interleukin 12 (IL-12) produced by antigen-presenting cells initiates the T(H)1 fate, signals that initiate the T(H)2 fate are not completely characterized. Here we show that early GATA-3 expression, required for T(H)2 differentiation, was induced by T cell factor 1 (TCF-1) and its cofactor beta-catenin, mainly from the proximal Gata3 promoter upstream of exon 1b. This activity was induced after T cell antigen receptor (TCR) stimulation and was independent of IL-4 receptor signaling through the transcription factor STAT6. Furthermore, TCF-1 blocked T(H)1 fate by negatively regulating interferon-gamma (IFN-gamma) expression independently of beta-catenin. Thus, TCF-1 initiates T(H)2 differentiation of activated CD4(+) T cells by promoting GATA-3 expression and suppressing IFN-gamma expression.