Whereas there is considerable information on the phenotypic and functional maturation of T cell receptor (TCR) alpha/beta thymocytes, comparatively little is known of the maturational processes that affect development of TCR-gamma/delta thymocytes. One class of gamma/delta T cells, those bearing the Vgamma3 gene product, are generated only during the early fetal stages of thymic development, and then migrate to the skin. Here we examine the intrathymic differentiation of these Vgamma3 + cells. The earliest Vgamma3 cells to appear in the thymus expressed low levels of TCR (Vgamma3low) and high levels of heat stable antigen (HSA). Over the next few days, Vgamma3+ thymocytes appeared which expressed high levels of TCR (Vgamma3high) and very low levels of HSA. The antigens CD5, CD45RB, and MEL14 were also differentially expressed on Vgamma3low versus Vgamma3high thymocytes, but the shift in expression was the opposite as compared with immature and mature TCR-alpha/beta thymocytes. Transfer experiments of sorted Vgamma3low/HSA(high) thymocytes to SCID thymic lobes showed that these cells were indeed the precursors of Vgamma3high/HSA(low) thymocytes. The phenotype of the Vgamma3high thymocytes was similar to that of the postthymic Vgamma3+ cells found in the skin of adult mice. The differentiation of Vgamma3low in Vgamma3high thymocytes was also observed in fetal thymic organ culture. Addition of cyclosporin A (CsA) to these cultures had little effect on the appearance of Vgamma3low/HSA(high) cells, but blocked the appearance of Vgamma3high/HSA(low) cells. These results show that, like alpha/beta T cells, Vgamma3+ thymocytes differentiate from TCR(low) precursors to cells with a mature phenotype and that CsA inhibits this transition.