Classical T lymphocytes recognize foreign antigens in the context of self major histocompatibility complex (MHC) molecules by means of the T-cell receptor (TCR)alpha beta heterodimer. The genes for TCR beta-chains, like immunoglobulin genes, are subject to allelic exclusion. The introduction of a functional TCR-beta gene into the germline of mice prevents rearrangement of endogenous TCR-beta genes. Here we report that the introduction of a non-functional TCR-beta genes. Here we report that the introduction of a non-functional TCR-beta gene with a deletion of the major part of the variable region (delta V-TCR-beta), also inhibits endogenous TCR-beta gene rearrangement. This inhibition is mediated via the encoded protein because impairment of endogenous TCR-beta gene rearrangement is not found if a frameshift mutation is introduced into the DJ region of the delta V-TCR-beta transgene. The delta V-TCR-beta transgene can lead to two phenotypes, in which lymphoid development is perturbed. Phenotype A is characterized by a severe impairment of both T and B cell development as reflected by the complete absence of certain lymphoid organs. In phenotype B, lymphoid organs are macroscopically normal, but T cell differentiation is impeded. Virtually all thymocytes lack membrane expression of TCR-alpha beta, but nevertheless carry the CD4 and CD8 antigens (CD4+CD8+ phenotype); they do not, however, mature further. The defect in mice of phenotype B but not of phenotype A can be corrected by the introduction of a functional TCR-beta gene.