Differentiation of Th cells from naive precursors is a dynamic process that involves multiple transcription factors acting at specific time points to regulate gene expression. In this study we show that the homeobox transcription factor Hlx is up-regulated early in Th1 cell differentiation. Mice constitutively expressing an Hlx transgene driven by a CD4 promoter showed marked reduction in the CD4+CD8+ thymocyte population. The Hlx transgenic mice generated increased numbers of Th1 cells in response to keyhole limpet hemocyanin immunization. After differentiation under Th2-polarizing conditions in vitro, the transgenic CD4 T cells expressed high levels of IFN-gamma. Intracellular cytokine staining revealed that in addition to Th2 cells, large numbers of Th0 and Th1 cells were generated from such in vitro differentiated transgenic CD4 T cells. Retrovirally overexpressed Hlx also induced the aberrant expression of IFN-gamma in normal CD4 T cells differentiated under Th2-polarizing conditions. This effect was apparent only when Hlx was introduced into the cells by retroviral infection at an early time point that led to the expression of the retrovirally transferred Hlx gene at a time comparable to that of the up-regulation of the endogenous Hlx during Th1 cell differentiation. Later infection with Hlx-expressing retrovirus showed no effect. Thus, the induction of IFN-gamma expression by Hlx depends on a permissive epigenetic state of the IFN-gamma gene locus and/or the molecular context of the immature Th cells.