Adult stem cells maintain tissue homeostasis by controlling the proper balance of stem cell self-renewal and differentiation. The adult midgut of Drosophila contains multipotent intestinal stem cells (ISCs) that self-renew and produce differentiated progeny. Control of ISC identity and maintenance is poorly understood. Here we find that transcriptional repression of Notch target genes by a Hairless-Suppressor of Hairless complex is required for ISC maintenance, and identify genes of the Enhancer of split complex [E(spl)-C] as the major targets of this repression. In addition, we find that the bHLH transcription factor Daughterless is essential to maintain ISC identity and that bHLH binding sites promote ISC-specific enhancer activity. We propose that Daughterless-dependent bHLH activity is important for the ISC fate and that E(spl)-C factors inhibit this activity to promote differentiation.