Transgenic mice expressing a major histocompatibility complex class II-restricted T cell receptor with specificity for a natural self-antigen, the fifth component of complement, were generated to analyze the mechanism of tolerance induction to a blood-borne self-protein. In the absence of C5 protein thymocytes from T cell receptor transgenic mice develop into mature CD4 single positive cells which emigrate into the periphery and mount C5-specific T cell responses upon immunization with C5. In the presence of circulating C5 protein, CD4 single positive thymocytes do not develop. Negative selection occurs late in thymic ontogeny leaving the bulk of CD4+8+ thymocytes unaffected. This phenotype may be due to a delay in contact with self-antigen presentation which, under physiological conditions, is inefficient in the cortex of C5+ mice, and therefore does not affect most immature double positive thymocytes. In contrast, in vitro exposure to C5(-)-presenting dendritic cells or in vivo injection of C5 peptide results in deletion of double positive thymocytes. C5+ transgenic mice are tolerant in vivo, but contain T cells in spleen and lymph nodes that secrete interleukin 2 and interferon gamma in response to C5 activation in vitro. When crossed onto a Rag1-/- background to prevent endogenous T cell receptor rearrangements, these peripheral potentially autoreactive cells do not appear. This indicates that endogenous T cell receptor rearrangements possibly leading to the expression of two receptors might be a prerequisite for their survival and export into the periphery.