We have recently identified a dominant wave of CD4-CD8- (double- negative [DN]) thymocytes in early murine fetal development that express low affinity Fc gamma receptors (Fc gamma RII/III) and contain precursors for Ti alpha/beta lineage T cells. Here we show that Fc gamma RII/III is expressed in very immature CD4low single-positive (SP) thymocytes and that Fc gamma RII/III expression is downregulated within the DN subpopulation and before the CD3-CD8low SP stage in T cell receptor (TCR)-alpha/beta lineage-committed thymocytes. DN Fc gamma RII/III+ thymocytes also contain a small fraction of TCR-gamma/delta lineage cells in addition to TCR-alpha/beta progenitors. Fetal day 15.5 DN TCR-alpha/beta lineage progenitors can be subdivided into three major subpopulations as characterized by cell surface expression of Fc gamma RII/III vs. CD2 (Fc gamma RII/III+CD2-, Fc gamma RII/III+CD2+, Fc gamma RII/III-CD2+). Phenotypic analysis during fetal development as well as adoptive transfer of isolated fetal thymocyte subpopulations derived from C57B1/6 (Ly5.1) mice into normal, nonirradiated Ly5.2 congenic recipient mice identifies one early differentiation sequence (Fc gamma RII/III+CD2(-)-->Fc gamma RII/III+CD2(+)-->Fc gamma RII/III- CD2+) that precedes the entry of DN thymocytes into the CD4+CD8+ double- positive (DP) TCRlow/- stage. Unseparated day 15.5 fetal thymocytes develop into DP thymocytes within 2.5 d and remain at the DP stage for > 48 h before being selected into either CD4+ or CD8+ SP thymocytes. In contrast, Fc gamma RII/III+CD2- DN thymocytes follow this same developmental pathway but are delayed by approximately 24 h before entering the DP compartment, while Fc gamma RII/III-CD2+ display accelerated development by approximately 24 h compared with total day 15.5 thymocytes. Fc gamma RII/III-CD2+ are also more developmentally advanced than Fc gamma RII/III+CD2- fetal thymocytes with respect to their TCR beta chain V(D)J rearrangement. At day 15.5 in gestation, beta chain V(D)J rearrangement is mostly, if not entirely, restricted to the Fc gamma RII/III-CD2+ subset of DN fetal thymocytes. Consistent with this analysis in fetal thymocytes, > 90% of adult thymocytes derived from mice carrying a disrupting mutation at the recombination- activating gene 2 locus (RAG-2-/-) on both alleles are developmentally arrested at the DN CD2- stage. In addition, there is a fivefold increase in the relative percentage of thymocytes expressing Fc gamma RII/III in TCR and immunoglobulin gene rearrangement-incompetent homozygous RAG-2-/- mice (15% Fc gamma RII/III+) versus rearrangement- competent heterozygous RAG-2+/- mice (< 3% Fc gamma RII/III+). Thus, Fc gamma RII/III expression defines an early DN stage preceding V beta(D beta)I beta rearrangement, which in turn is followed by surface expression of CD2. Loss of Fc gamma RII/III and acquisition of CD2 expression characterize a late DN stage immediately before the conversion into DP thymocytes.