Adult mice injected with Moloney murine leukemia virus (M-MuLV) 1 day after a short term treatment with anti-CD4 mAb developed T cell lymphomas, or sarcomas when rechallenged with Moloney murine sarcoma virus (M-MSV). Neoplastic development was correlated with virus spread, as thymic and peripheral T and B lymphocytes promptly expressed M-MuLV-induced Ag after virus introduction; no virus-specific CTL generation was detected in MLTC. This failure, which was selective for M-MuLV-induced Ag, persisted throughout the life span of the mice, and was not sustained by suppressor cell activity. The frequencies of splenic virus-specific CTL precursor varied in relation to time after virus injection; in the first postinjection month, frequencies were similar to those in nonimmune control mice, while at 4 mo post-virus exposure, they showed a striking reduction. These findings indicate that a transient functional impairment of CD4+ cells at the time of retrovirus injection provided the appropriate milieu for tolerance induction in both the peripheral mature and intrathymic T cell compartments.