The contribution of the CDB beta subunit to CD8 coreceptor function is poorly understood. We now demonstrate that the CD8 beta extracellular domain increases the avidity of CD8 binding to MHC I, and that the intracellular domain of CD8 beta enhances association with two intracellular molecules required for TCR signal transduction, Lck and LAT. By assessing CD8(+) T cell differentiation in CD8 beta-deficient mice reconstituted with various transgenic CD8 beta chimeric molecules, we also demonstrate that the intracellular and extracellular domains of CD8 beta can contribute independently to CD8(+) T cell development, but that both CD8 beta domains together are most efficient. Thus, this study identifies the molecular functions of the CD8 beta intracellular and extracellular domains and documents their contributions to CD8(+) T cell development.