CD25 expression occurs early in thymocyte differentiation. The mechanism of induction of CD25 before T cell receptor rearrangement and the importance of this mechanism for T cell development are unknown. In a thymus reconstitution assay, tumor necrosis factor alpha (TNF-alpha) and interleukin-1 alpha (IL-1 alpha), two cytokines produced within the thymic microenvironment, induced CD25 expression on early immature thymocytes. Either TNF-alpha or IL-1 alpha was necessary for further thymocyte maturation and CD4(+)CD8(+) differentiation. In irradiated mice reconstituted with CD117(+)CD25(+) thymocytes, commitment to the T cell lineage was marked by the loss of precursor multipotency.