The SCL and LMO oncogenes are frequently activated in childhood T cell acute leukemia (T-ALL). SCL is a transcription factor of the basic helix-loop-helix (bHLH) family that forms heterodimers with other members of the family, specifically HEB and E2A. SCL can activate or repress transcription but the mechanism through which SCL functions as an oncogene remains to be clarified. Ectopic expression of SCL and LMO in the thymus of transgenic mice causes thymocyte differentiation arrest during the preleukemic phase with aberrant differentiation at the DN3-DN4 stage, prior to the acquisition of CD4 and CD8. We therefore took several approaches to define the mechanism underlying differentiation arrest in these cells. We first analyzed global gene expression of pre-leukemic DN3 thymocytes from SCLtg/LMOtg mice against their wild type littermates. We found that in this context, these oncogenes act as global transcriptional repressor as 90% of the genes with more than two fold differences are repressed when compared to wild type controls. Furthermore, we identify the HEB/E2A pathway as being targeted by SCL/LMO and used different approaches to show that the HEB/E2A activity is repressed by these oncogenes. First, using real-time quantitative PCR, we confirmed the repression of known HEB/E2A target genes (pTa and Rag1/2). In addition, we identified new HEB/E2A target genes that were confirmed as direct target through chromatin immunoprecipitation of primary thymocytes. This array also reveals that SCL associates with HEB and/or E2A on DNA to repress their function. Furthermore, we took a genetic approach to show that SCL/LMO collaborates with HEB haploinsufficiency in inducing leukemia. Our observations therefore reveal that the repression of the HEB pathway is crucial for T cell transformation. The importance of this repression is underscored by the fact that the E2A/HEB target genes that we identify here are expressed at low levels in primary leukemic cells from T-ALL patients when compared to B-ALL or AML samples. Together, these results show that SCL/LMO repress HEB/E2A activity to block T cell differentiation, an important step for T cell leukemia.