T cells expand without intentional antigen stimulation when transferred into adult lymphopenic environments. In this study, we show that the physiologic lymphopenic environment existing in neonatal mice also supports CD4 T cell proliferation. Strikingly, naive CD4 T cells that proliferate within neonates acquire the phenotypic and functional characteristics of memory cells. Such proliferation is inhibited by the presence of both memory and naive CD4 T cells, is enhanced by 3-day thymectomy, is independent of IL-7, and requires a class II MHC-TCR interaction and a CD28-mediated signal. CD44(bright) CD4 T cells in neonates have a wide repertoire as judged by the distribution of Vbeta expression. Thus, lymphopenia-induced T cell proliferation is a physiologic process that occurs during the early postnatal period.