While the development of bone marrow hematopoietic stem cell-dependent innate lymphoid cells (ILCs) in mice is well elucidated, their earliest embryonic production site remains to be investigated. Our study identifies a spatiotemporally restricted contribution of yolk sac-derived hematopoiesis to ILC development. Using inducible lineage tracing and single-cell transcriptomics, we demonstrate that yolk sac-derived progenitors generate ILCs that arise in early embryogenesis and are selectively specified in the fetal small intestine. Although these cells are detectable across multiple fetal organs, the activation of ILC-specific transcriptional programs is confined exclusively to the intestinal environment. This contribution to ILC development is temporal, diminishing rapidly after birth, and is restricted to a narrow developmental window. These findings provide new insights into the temporal and spatial regulation of early hematopoietic contributions to the ILC lineage, revealing an unappreciated role for yolk sac-derived progenitors in shaping the early stages of ILC development.