A transgenic mouse was generated expressing on most (> 80%) of thymocytes and peripheral T cells a T-cell receptor isolated from a cytotoxic T-cell clone (F5). This clone is CD8+ and recognizes alpha alpha 366-374 of the nucleoprotein (NP 366-374) of influenza virus (A/NT/60/68), in the context of Class I MHC Db (Townsend et al., 1986). The receptor utilizes the V beta 11 and V alpha 4 gene segments for the beta chain and alpha chain, respectively (Palmer et al., 1989). The usage of V beta 11 makes this TcR reactive to Class II IE molecules and an endogenous ligand recently identified as a product of the endogenous mammary tumour viruses (Mtv) 8, 9, and 11 (Dyson et al., 1991). Here we report the development of F5 transgenic T cells and their function in mice of the appropriate MHC (C57BL/10 H-2b, IE-) or in mice expressing Class II MHC IE (e.g., CBA/Ca H-2k and BALB/c H-2d) and the endogenous Mtv ligands. Positive selection of CD8+ T cells expressing the V beta 11 is seen in C57BL/10 transgenic mice (H-2b). Peripheral T cells from these mice are capable of killing target cells in an antigen-dependent manner after a period of in vitro culture with IL-2. In the presence of Class II MHC IE molecules and the endogenous Mtv ligand, most of the single-positive cells carrying the transgenic T-cell receptor are absent in the thymus. Unexpectedly, CD8+ peripheral T-cells in these (H-2k or H-2d) F5 mice are predominantly V beta 11 positive and also have the capacity to kill targets in an antigen-dependent manner. This is true even following backcrossing of the F5 TcR transgene to H-2d scid/scid mice, in which functional rearrangement of endogenous TcR alpha- and beta-chain genes is impaired.