A better understanding of the molecular mechanisms driving hematopoietic stem cell (HSC) specification and expansion may enable better pharmacological strategies to produce them in sufficient numbers for transplantation. In the embryo, HSCs arise from a defined subset of arterial endothelial cells (ECs) located in the aorta-gonad-mesonephros (AGM) region that undergo endothelial to hematopoietic transition (EHT). Arterialization and HSC development are generally believed to require the action of Notch. Here we show that although Notch activity is initially required for arterialization,it is detrimental to subsequent EHT. Mechanistically, we show that effective EHT depends on a Mfng induced decrease in Jag1-Notch signaling in hemogenic ECs. This causes upregulation of Mycn, an important metabolic and cell-cycle regulator that we found to be required for EHT. During the subsequent development of hematopoietic lineages, Mycn expression decreases and its function is taken on by the homologous Myc gene.