NK1.1+TCR alpha beta+ (NK1+) T cells are an unusual subset of mouse TCR alpha beta+ cells found primarily in adult thymus and liver. In contrast to conventional TCR alpha beta+ cells, NK1+ T cells have a TCR repertoire that is highly skewed to V alpha14 and to Vbeta8, -7, and -2. The developmental origin and ligand specificity of NK1+ T cells are controversial. We show here that NK1+ T cells with a typically biased V alpha and V beta repertoire develop in cytokine-supplemented suspension cultures of fetal liver established from either normal or athymic mice. Furthermore, NK1+ T cell development in fetal liver cultures is abrogated in beta2m-deficient mice (which lack MHC class I and other related molecules) and can be partially inhibited by the presence of anti-CD1 mAbs. Moreover, mixing experiments indicate that recombination-deficient SCID fetal liver cells can reconstitute NK1+ T cell development in beta2m-deficient fetal liver cultures. Collectively, our data demonstrate that NK1+ T cells can develop extrathymically from fetal liver precursors and that a beta2m-associated ligand (putatively CD1) present on nonlymphoid cells is essential for their positive selection and/or expansion.