Whereas transformation events in hematopoietic malignancies may occur at different developmental stages, the initial mutation originates in hematopoietic stem cells (HSCs), creating a preleukemic stem cell (PLSC). Subsequent mutations at either stem cell or progenitor cell levels transform the PLSC into lymphoma/leukemia initiating cells (LIC). Thymic lymphomas have been thought to develop from developing thymocytes. T cell progenitors are generated from HSCs in the bone marrow (BM), but maturation and proliferation of T cells as well as T-lymphomagenesis depends on both regulatory mechanisms and microenvironment within the thymus. We studied PLSC linked to thymic lymphomas. In this study, we use MSH2-/- mice as a model to investigate the existence of PLSC and the evolution of PLSC to LIC. Following BM transplantation, we found that MSH2-/- BM cells from young mice are able to fully reconstitute multiple hematopoietic lineages of lethally irradiated wild-type recipients. However, all recipients developed thymic lymphomas within three and four months post transplantation. Transplantation of different fractions of BM cells or thymocytes from young health MSH2-/- mice showed that an HSC enriched fraction always reconstituted hematopoiesis followed by lymphoma development. In addition, lymphomas did not occur in thymectomized recipients of MSH2-/- BM. These results suggest that HSCs with DNA repair defects such as MSH2-/- are PLSCs because they retain hematopoietic function, but also carry an obligate lymphomagenic potential within their T-cell progeny that is dependent on the thymic microenvironment.