The maturation of CD4+8- and CD4-8+ thymocytes from CD4+8+ thymocytes is dependent on the mandatory interaction of their alpha beta TCR with selecting ligands expressed on thymic epithelial cells (TE). This is referred to as positive selection. The deletion of CD4+8+ thymocytes that express autospecific TCR (negative selection) is mediated primarily by bone marrow-derived cells. Previous studies have shown that TE is relatively ineffective in mediating the deletion of CD4+8- thymocytes expressing autospecific TCR but TE can render them anergic, i.e., nonresponsive, to the self Ag. The mechanism by which anergy is induced in these cells is unknown. In this study, we used thymocytes expressing a transgenic TCR specific for the male Ag presented by H-2Db class I MHC molecules to examine how expression of the deleting ligand by TE affects thymocyte development and phenotype. The development of female TCR-transgenic thymocytes was examined in irradiated male hosts or in female hosts that had received male fetal thymic epithelial implants. It was observed that the development of transgenic-TCR+ thymocytes was affected in mice with male TE. CD4+8+ thymocytes with reduced CD8 expression and markedly enhanced transgenic TCR expression accumulated in mice with male TE. Development of CD4-8+ thymocytes was also affected in these mice in that fewer were present and they expressed an intermediate CD8 coreceptor level. These CD4-8+ thymocytes expressed a high level of the transgenic TCR, retained the ability to respond to anti-TCR antibodies, but were nonresponsive to male APC. However, the maturation of CD4+8- thymocytes, which are also derived from CD4+8+ precursor cells, was relatively unaffected. In an in vitro assay for assessing negative selection, male TE failed to delete CD4+8+ thymocytes expressing the transgenic TCR under conditions where they were efficiently deleted by male dendritic cells. Collectively these results support the conclusion that male TE was inefficient in mediating deletion. Furthermore, expression of the deleting ligand on thymic epithelium interferes with the maturation of functional male-specific T cells and results in the accumulation of CD4+8+ and CD4-8+ thymocytes expressing a lower level of the CD8 coreceptor but a high level of the transgenic TCR.