Donor-specific tolerance can be induced across a discordant xenogeneic barrier in T/NK cell-depleted, thymectomized (ATX) B10 mice by grafting of fetal pig thymic and liver tissue (FP THY/LIV) under the kidney capsule. We have now examined the phenotype and function of murine T cells that develop in FP THY/LIV grafts in these mice. Mouse CD4+ T cells reached normal levels in PBL by 14 wk, and were maintained up to 30 wk. Similar proportions of splenic CD4+ cells expressed the naive phenotype (CD45RBhighMEL-14+CD44low) in FP THY/LIV graft recipients and euthymic control mice. These CD4 cells were functional, demonstrating normal proliferative responses and up-regulation of CD25 and CD69 after activation by mitogens or alloantigens. They proliferated in response to the protein Ag KLH presented by host MHC following in vivo immunization. ATX B10 mice grafted with FP THY/LIV also cleared Pneumocystis carinii infections, whereas simultaneously-treated ATX B10 mice not receiving FP THY were unable to do so. Discordant xenogeneic thymus grafting can therefore restore immune competence. Thus, in addition to tolerance induction, xenogeneic thymic replacement might have a potential role in the reconstitution of immunity in patients afflicted with immunodeficiencies affecting the thymus.