A TCR-beta gene lacking V domain sequences (delta V-TCR-beta) was inserted into the germline of mice. Expression of the transgene inhibited endogenous TCR-beta, but not TCR-alpha gene rearrangement and expression. The mutated TCR-beta gene affected alpha beta T cell development: the common thymocyte pool was normal in cell number, with cells expressing CD4 and CD8, but the mature, "CD3bright" population expressing either CD4 or CD8 molecules was reduced by 90%. To help understand these effects on TCR-beta gene rearrangement and T cell development, biosynthesis of the delta V-TCR-beta protein was analyzed in a tumor cell line derived from a transgenic mouse. Despite absence of the V domain, the delta V-TCR-beta chain paired with endogenous TCR-alpha chains and assembled with CD3 gamma, -delta, -epsilon, and -zeta components in the endoplasmatic reticulum, followed by transport through the Golgi complex to the plasma membrane. Therefore, assembly of the complex, and even cell surface expression, may be relevant for allelic exclusion of the TCR-beta gene. In the common thymocyte population, the CD3 components, endogenous TCR-alpha, and the delta V-TCR-beta gene product were expressed at the RNA level, but endogenous TCR-beta was not. The TCR-alpha delta beta/CD3 complex was present at the cell surface at low levels and was functional in terms of anti-CD3-induced Ca2+ mobilization. The observed arrest of alpha beta T cell development at the CD4+8+ thymocyte stage indicates that ligand recognition by the TCR, with contribution of the beta-chain V domain, is not required for transition of CD4-8- thymocytes to the CD4+8+ phenotype, but necessary for entry into the "single positive," CD3bright differentiation stage.