Intestinal intraepithelial lymphocytes are considered to be distinct from thymus-derived cells and are thought to derive locally from cryptopatch (CP) precursors. Although the development and homing of IELs have been studied in some details, the factors controlling their homeostasis are incompletely understood. Here, we demonstrate that FADD, a classic adaptor protein required for death-receptor-induced apoptosis, is a critical regulator of the intestinal IEL development. The mice with a dominant negative mutant of FADD (FADD-DN) display a defective intestinal IELs with a marked defect on CD8αα+TCRγδ+ T cells. We analyzed lamina propria lymphocytes (LPLs) and found the massive accumulation of IL-7R-lin- LPLs in FADD-DN mice. IL-7 plays a differentiation inducing role in the development of intestinal IELs and its receptor IL-7R is a transcriptional target of Notch1. The level of Notch1 expression also showed very low in Lin- LPLs cells from FADD-DN mice, indicating a possible molecular mechanism of FADD in the early IEL development. In addition, loss of γδ IELs induced by FADD-DN results in a worsening inflammation in murine DSS-induced colitis model.