We have taken advantage of the Cre/lox system to generate a mouse model with inducible deficiency of transforming growth factor beta receptor II (TbetaRII). Using this approach, transforming growth factor beta (TGF-beta) signaling deficiency can be restricted to the hematopoietic system by bone marrow transplantation. Mice that received transplants with TbetaRII-/- bone marrow develop a lethal inflammatory disorder closely resembling that of TGF-beta1-null mice. Previous in vitro studies have suggested multiple roles for TGF-beta in T-cell development, including proliferation, apoptosis, and differentiation. We used our transplantation model to ask whether T-cell development is normal in the absence of TGF-beta signaling. The findings show for the first time in vivo and in fetal thymus organ culture (FTOC) that TGF-beta is not required for thymocytes to differentiate along the entire pathway of thymic T-cell development, as defined by the expression patterns of CD4, CD8, CD25, and CD44. In contrast to previous investigations, no increase of thymocyte apoptosis was observed. However, TbetaRII-deficient CD8+ thymocytes displayed a 2-fold increase in proliferation rate, as determined by bromodeoxyuridine (BrdU) incorporation in vivo. These results reinforce the importance of TGF-beta as an immune regulator critical for T-cell function.