The T cell receptor beta (TCR beta) chain controls the developmental transition from CD4-CD8- to CD4+8+thymocytes. We show that the extracellular constant region and the transmembrane region, but not the variable domain or cytoplasmic tail of the TCR beta chain are required for this differentiation step. TCR beta mutant chains lacking the cytoplasmic tail can be found at the cell surface both in functional TCR/CD3 complexes and in a GPI-anchored monomeric form indicating that the cytoplasmic tail of the TCR beta chain functions as an ER retention signal. The concordance between cell surface expression of the mutant chains as TCR/CD3 complexes and their capacity to mediate thymocyte differentiation supports the CD3 mediated feedback model in which preTCR/CD3 complexes control the developmental transition from CD4-CD8- to CD4+CD8+thymocytes.