The purposes of this study were to elucidate the effects of recombinant human interleukin 7 (rhIL-7) on proliferation as well as differentiation of human fetal thymocytes and to analyze the biochemical nature of the IL-7 receptor-linked transmembrane signal. In the absence of costimulants, rhIL-7 stimulated the in vitro proliferation and colony formation of CD4+CD8+ double-positive immature fetal thymocytes. Furthermore, rhIL-7 promoted partial differentiation of immature thymocytes with a selective advantage for the development of CD4+CD8- single-positive thymocytes. Our observations suggest that IL-7 likely has an important regulatory role during the earliest stages of human T-cell ontogeny. Stimulation of fetal thymocytes with rhIL-7 resulted in enhanced tyrosine phosphorylation of three distinct phosphoproteins with molecular masses of 72, 98, 123, and 190 kDa and induced a rapid and biphasic increase in the production of inositol 1,4,5-trisphosphate, which was inhibitable by the tyrosine protein kinase inhibitor genistein. Thus, the transmembrane signal triggered by engagement of the IL-7 receptor is intimately linked to a functional tyrosine protein kinase pathway and stimulates the inositol phospholipid turnover and proliferation, as well as selective differentiation to the CD4 lineage, by human fetal thymocytes.