The parasite Toxoplasma gondii persists in host organisms by converting from replicating tachyzoites to latent bradyzoites housed in tissue cysts. The molecular mechanisms that mediate T. gondii differentiation remain poorly understood. Through a chemical mutagenesis screen, we identified translation initiation factor eIF1.2 as a critical factor for T. gondii differentiation. A F97L mutation in eIF1.2 or the genetic ablation of eIF1.2 (eIF1.2 KO) markedly impedes bradyzoite cyst formation in culture and in the brains of infected mice. eIF1.2 KO parasites are defective in the upregulation of bradyzoite induction factors BFD1 and BFD2 during stress-induced differentiation. Conditional overexpression of BFD1 or BFD2 significantly rescues differentiation in eIF1.2 KO parasites. We further show that eIF1.2 interacts with the yeast 40S ribosomal subunit and directs the scanning of a model 5' untranslated region. Together, our findings suggest that eIF1.2 functions by regulating the translation of key differentiation factors necessary to establish chronic toxoplasmosis.