Interactions between stromal cells and thymocytes play a crucial role in T cell development. The thymic stroma is complex and consists of epithelial cells derived from the pharyngeal region during development, together with macrophages and dendritic cells of bone marrow origin. In addition, fibroblasts and matrix molecules permeate the whole framework. It is now apparent that these individual stromal components play specialized roles at different stages of T cell differentiation. Thus, at the early CD4-8- stage of development, T cell precursors require fibroblast as well as epithelial cell interactions. Later, at the CD4+8+ stage, as well as providing low avidity TCR/MHC-peptide interactions, thymic epithelial cells have been shown to possess unique properties essential for positive selection. Dendritic cells, on the other hand, are probably efficient mediators of negative selection, but they may not be solely responsible for this activity. Alongside the functional roles of stromal cells, considerable progress is being made in unraveling the nature of the signaling pathways involved in T cell development. Identification of the pre-T cell receptor (pre-TCR) and associated signaling molecules marks an important advance in understanding the mechanisms that control gene rearrangement and allelic exclusion. In addition, a better understanding of the signaling pathways that lead to positive selection on the one hand and negative selection on the other is beginning to emerge. Many issues remain unresolved, and some are discussed in this review. What, for example, is the nature of the chemotactic factor(s) that attract stem cells to the thymus? What is the molecular basis of the essential interactions between early thymocytes and fibroblasts, and early thymocytes and epithelial cells? What is special about cortical epithelial cells in supporting positive selection? These and other issues are ripe for analysis and can now be approached using a combination of modern molecular and cellular techniques.