TAF7, a component of the TFIID complex that nucleates the assembly of transcription preinitiation complexes, also independently interacts with and regulates the enzymatic activities of other transcription factors, including P-TEFb, TFIIH, and CIITA, ensuring an orderly progression in transcription initiation. Since not all TAFs are required in terminally differentiated cells, we examined the essentiality of TAF7 in cells at different developmental stages in vivo. Germ line disruption of the TAF7 gene is embryonic lethal between 3.5 and 5.5 days postcoitus. Mouse embryonic fibroblasts with TAF7 deleted cease transcription globally and stop proliferating. In contrast, whereas TAF7 is essential for the differentiation and proliferation of immature thymocytes, it is not required for subsequent, proliferation-independent differentiation of lineage committed thymocytes or for their egress into the periphery. TAF7 deletion in peripheral CD4 T cells affects only a small number of transcripts. However, T cells with TAF7 deleted are not able to undergo activation and expansion in response to antigenic stimuli. These findings suggest that TAF7 is essential for proliferation but not for proliferation-independent differentiation.