The olfactory system enables animals to detect and discriminate an unlimited array of odorants, which is accomplished by distinct subsystems expressing different classes of olfactory receptor genes. However, the mechanisms governing the development of these subsystems remain poorly understood. Here, we identify an unexpected role of TBR1, a brain-specific transcription factor best known for its function in early cortical development, in redirecting the identity of the trace amine-associated receptor (TAAR) subsystem. TBR1 is selectively expressed in olfactory sensory neurons (OSNs) expressing TAARs, but not in those expressing canonical odorant receptors (ORs). Knockout of Tbr1 abolishes expression of the entire Taar gene repertoire and completely eliminates TAAR OSNs, a phenotype that can be rescued by Tbr1 reexpression. Conversely, overexpression of Tbr1 in immature OSNs markedly increases the number of TAAR OSNs. Mechanistically, TBR1 enhances the accessibility of the TAAR-specific enhancers and activates them to drive Taar gene expression. Finally, we show that in the absence of Tbr1, OSNs forfeit their TAAR identity and are redirected toward the OR subsystem, challenging the canonical view that olfactory subsystems are predetermined and not interconvertible. Together, our findings support a new “factory setting switch” model in which the OR subsystem represents the default OSN fate (“factory setting”), but can be reprogrammed to the TAAR subsystem (“switch”) by TBR1 expression.