In vertebrates, embryonic hematopoietic stem and progenitor cells (HSPCs) are derived from a subset of endothelial cells, the hemogenic endothelium (HE), through the endothelial-to-hematopoietic transition (EHT). Notch signaling is essential for HSPC development during embryogenesis across vertebrates. However, whether and how it regulates EHT remains unclear. Here, we show that G protein-coupled receptor 183 (Gpr183) signaling serves as an indispensable switch for HSPC emergence by repressing Notch signaling before the onset of EHT. Inhibition of Gpr183 significantly upregulates Notch signaling and abolishes HSPC emergence. Upon activation by its ligand 7α-25-OHC, Gpr183 recruits β-arrestin1 and the E3 ligase Nedd4 to degrade Notch1 in specified HE cells and then facilitates the subsequent EHT. Importantly, 7α-25-OHC stimulation promotes HSPC emergence in vivo and in vitro, providing an attractive strategy for enhancing the in vitro generation of functional HSPCs.