Mature T cells express either CD4 or CD8 on their surface. Most helper T cells express CD4, which binds to class II major histocompatibility complex (MHC) proteins, and most cytotoxic T cells express CD8, which binds to class I MHC proteins. In the thymus, mature CD4+CD8- and CD4-CD8+ T cells expressing alpha beta T-cell antigen receptors (TCR) develop from immature thymocytes through CD4+CD8+ alpha beta TCR+ intermediates. Experiments using mice transgenic for alpha beta TCR suggest that the specificity of the TCR determines the CD4/CD8 phenotype of mature T cells. These results, however, do not indicate how a T cell differentiates into the CD4 or CD8 lineage. Here we show that the CD4 transmembrane region and/or cytoplasmic tail mediates the delivery of a specific signal that directs differentiation of T cells to a CD4 lineage. We generated transgenic mice expressing a hybrid molecule composed of the CD8 alpha extracellular domains linked to the CD4 transmembrane region and cytoplasmic tail. We predicted that this hybrid molecule would bind to class I MHC proteins through the extracellular domains but deliver the intracellular signals characteristic of CD4. By crossing our transgenic mice with mice expressing a transgenic alpha beta TCR specific for a particular antigen plus class I MHC protein, we were able to express the hybrid molecule in developing thymocytes expressing the class I MHC-restricted TCR. Our results show that the signal transduced by the hybrid molecule results in the differentiation of immature thymocytes expressing a class I-restricted TCR into mature T cells expressing CD4.