The immune system, despite its complexity, is maintained at a relative steady state. Mechanisms involved in maintaining lymphocyte homeostasis are poorly understood; however, recent availability of transgenic (Tg) and knockout mouse models with altered balance of lymphocyte cell populations suggest that cytokines play a major role in maintaining lymphocyte homeostasis. We show here that transforming growth factor (TGF)-beta plays a critical role in maintaining CD8(+) T cell homeostasis in a Tg mouse model that specifically overexpresses a dominant negative TGF-beta II receptor (DNRII) on T cells. DNRII T cell Tg mice develop a CD8(+) T cell lymphoproliferative disorder resulting in the massive expansion of the lymphoid organs. These CD8(+) T cells are phenotypically "naive" except for the upregulation of the cell surface molecule CD44, a molecule usually associated with memory T cells. Despite their dominance in the peripheral lymphoid organs, CD8(+) T cells appear to develop normally in the thymus, suggesting that TGF-beta exerts its homeostatic control in the peripheral immune system.