Thymocytes can be rendered tolerant by non-deletional mechanisms upon interaction with major histocompatibility complex (MHC) antigens on thymic epithelium. Whether the epithelial cells in the cortex or medulla could mediate this effect was not clear so far. To address this question, a transgenic mouse was generated in which the bovine keratin IV promoter was used to control expression of the alloantigen Kb. In the periphery the Kb transgene was expressed on a subset of keratinocytes. In the thymus expression was restricted to a subpopulation of medullary epithelial cells. No expression was found in the cortex. Such a tissue distribution has been reported for the keratin IV molecule demonstrating the faithfulness of the promoter used here. To follow the fate of the Kb-reactive thymocytes, this mouse was mated with another transgenic mouse expressing an anti-Kb T cell receptor (TcR). In the double-transgenic mice the CD8+CD4- thymocytes were not deleted but they were found to be anergic as assayed by their failure to be activated in vitro by either Kb-positive spleen cells or by cross-linked anti-TcR antibodies. These observations establish that expression of an MHC class I antigen in the thymic medullary epithelium is sufficient to induce anergy in the mature CD8+CD4- thymocyte population.