Fetal lymphoid tissue inducer (LTi) cells are required for lymph node and Peyer's patch (PP) organogenesis, but where these specialized group 3 innate lymphoid cells (ILC3s) develop remains unclear. Here, we identify extrahepatic arginase-1(+) Id2(+) fetal ILC precursors that express a transitional developmental phenotype (ftILCPs) and differentiate into ILC1s, ILC2s and ILC3s in vitro. These cells populate the intestine by embryonic day (E) 13.5 and, before PP organogenesis (E14.5-15), are broadly dispersed in the proximal gut, correlating with regions where PPs first develop. At E16.5, after PP development begins, ftILCPs accumulate at PP anlagen in a lymphotoxin-α-dependent manner. Thus, ftILCPs reside in the intestine during PP development, where they aggregate at PP anlagen after stromal cell activation and become a localized source of ILC populations.