Thymic plasmacytoid dendritic cells (pDCs) are located predominantly in the medulla and at the corticomedullary junction, the entry site of bone marrow-derived multipotential precursor cells into the thymus, allowing for interactions between thymic pDCs and precursor cells. We demonstrate that in vitro-generated pDCs stimulated with CpG or virus impaired the development of human autologous CD34(+)CD1a(-) thymic progenitor cells into the T-cell lineage. Rescue by addition of neutralizing type I interferon (IFN) antibodies strongly implies that endogenously produced IFN-alpha/beta is responsible for this inhibitory effect. Consistent with this notion, we show that exogenously added IFN-alpha had a similar impact on IL-7- and Notch ligand-induced development of thymic CD34(+)CD1a(-) progenitor cells into T cells, because induction of CD1a, CD4, CD8, and TCR/CD3 surface expression and rearrangements of TCRbeta V-DJ gene segments were severely impaired. In addition, IL-7-induced proliferation but not survival of the developing thymic progenitor cells was strongly inhibited by IFN-alpha. It is evident from our data that IFN-alpha inhibits the IL-7R signal transduction pathway, although this could not be attributed to interference with either IL-7R proximal (STAT5, Akt/PKB, Erk1/2) or distal (p27(kip1), pRb) events.