Recent studies have established that during embryonic development, hematopoietic progenitors and stem cells are generated from hemogenic endothelium precursors through a process termed endothelial to hematopoietic transition (EHT). The transcription factor RUNX1 is essential for this process, but itsmaindownstreameffectors remain largely unknown. Here, we report the identification of Gfi1 and Gfi1b as direct targets of RUNX1 and critical regulators of EHT. GFI1 and GFI1B are able to trigger, in the absence of RUNX1, the down-regulation of endothelial markers and the formation of round cells, a morphologic change characteristic of EHT. Conversely, blood progenitors in Gfi1- and Gfi1b-deficient embryos maintain the expression of endothelial genes. Moreover, those cells are not released from the yolk sac and disseminated into embryonic tissues. Taken together, our findings demonstrate a critical and specific role of the GFI1 transcription factors in the first steps of the process leading to the generation of hematopoietic progenitors from hemogenic endothelium. © 2012 by The American Society of Hematology.