Induction of thymus-dependent lymphocyte (T cell) differentiation was performed in vitro with thymic factors as inducers. T cell precursors from human bone marrow first expressed surface differentiation antigens and then acquired the capacity to form rosettes with sheep erythrocytes. The latter marker could not be induced when cells with differentiation antigens had been eliminated. The proliferative responses to phytomitogens or to allogeneic stimuli appeared to be characteristics of later stages in differentiation that also can be induced or amplified by in vitro incubation of marrow cells or thymocytes with thymic factors. When phytomitogen-responsive cells from peripheral blood were inactivated in vitro, the allogeneic response was enhanced. Although these responses are acquired almost concomitantly, they are therefore envisioned to be characteristics of separate T cell subsets. After immunological reconstitution of patients, the T cell development in vivo involves a succession of differentiation events similar to that described above. Our experiments with mice, using similar methods, have also shown that graft-versus-host inducing capacity is a function of a cell population distinct from that which yields a proliferative response to in vitro stimulation by phytohemagglutinin. These results support our model of sequential differentiation of human prothymocytes into various subsets of mature T cells.