Syngeneic rat radiation chimeras treated transiently with cyclosporine (CsA) often develop a GVHD-like syndrome after discontinuing the drug. CsA also causes medullary involution and loss of medullary epithelium in the thymus. Chronic graft-versus-host disease (GVHD), a late occurring syndrome following bone marrow transplantation with many features of autoimmune diseases, is thought by many to result from a thymic deficiency leading to a failure to develop specific tolerance for the host. A direct connection between a thymic deficiency and chronic GVHD was tested by transferring thymocytes from CsA-treated syngeneic Lewis chimeras into irradiated Lewis secondary recipients. Nine of 10 of these recipients had evidence of chronic GVHD in skin biopsies taken at 3 weeks posttransplant or in the autopsies at 5 weeks. Changes included characteristic lichen planuslike infiltrates and sclerodermalike changes in the skin, characteristic infiltrates and myositis of the tongue, often chronic hepatitis with bile duct injury, and interstitial and ductal infiltrates in the serous salivary glands. Immunoperoxidase stains of the skin and tongue infiltrates showed a marked predominance of W3/25+:OX8- lymphocytes. The hair follicles had increased expression of Ia antigen. The thymus in the secondary recipient had variable thymocyte reconstitution of the cortex and a mild to marked reduction in the relative size of the medulla. Stains for cytokeratin showed a moderate to marked reduction of cortical epithelium and marked to total loss of the medullary epithelium. These studies demonstrate that the features of post-CsA syngeneic GVHD resembling chronic GVHD result from an abnormal thymic microenvironment. They also provide additional evidence linking a thymus deficiency with chronic GVHD.