Thy-1 Ag and CD3-associated TCR-gamma (V gamma 3)/delta (V delta 1) are coexpressed on virtually all dendritic epidermal T cells (DETC) in the adult mouse. In contrast, day 16 fetal mouse skin contains small numbers of CD45+/Thy-1+/CD3- but no CD3+ cells. To see whether the CD45+/Thy-1+/CD3- fetal skin cells can qualify as DETC precursors, we transplanted day 16 fetal skin of C57BL/6 (Thy-1.2) mice onto adult B6Pl-Thy-1a (Thy-1.1) animals. At certain time points after transplantation, grafts were analyzed for the presence of Thy-1 and CD3/TCR Ag. Examination of the grafts, 4 days after transplantation, revealed the presence of few donor-type Thy-1.2+/CD3- and some Thy-1.2+/CD3+ epidermal cells of either round or dendritic configuration. At 10 weeks after transplantation, essentially all CD45+/Thy-1.2+ epidermal cells were anti-TCR V gamma 3 and anti-CD3-reactive, displayed a uniformly dendritic configuration, and, thus, represent DETC. Our assumption that CD45+/Thy-1+/CD3- cells are the only lymphocytes within day 16 fetal skin gained additional support by the observations: 1) that unfractionated as well as anti-CD45 gated single cell suspensions prepared from day 16 fetal skin were consistently devoid of anti-CD3 epsilon and anti-TCR V gamma 3-reactive cells; and 2) that stimulation of these cell suspensions with either Con A plus IL-2 or IL-2 alone regularly resulted in the outgrowth of CD45+/Thy-1+/CD3-/TCR V gamma 3- cells, but never in the appearance of CD45+/Thy-1+/CD3+/TCR V gamma 3+ cells. Our additional finding that Con A plus IL-2- or IL-2-stimulated day 16 fetal skin cells and cell lines derived therefrom contain transcripts of some (CD3 gamma, TCR C beta, TCR C gamma 1, TCR C gamma 4) but not of other (CD3 delta, CD3 epsilon, TCR C alpha, TCR C delta) genes encoding the CD3/TCR complex suggests that Thy-1+/CD3- fetal murine skin cells are of T cell lineage. We therefore propose that the fetal skin microenvironment can provide the stimuli promoting growth and maturation of CD3/TCR V gamma 3/V delta 1-expressing DETC from their CD3- precursors.