We used clinically relevant murine allogeneic bone marrow transplantation (BMT) models to study the mechanisms by which IL-7 administration can improve posttransplant peripheral T cell reconstitution. After transplant we could distinguish two populations of mature donor T cells: (a) alloreactive T cells with decreased expression of CD127 (IL-7 receptor alpha chain) and (b) nonalloreactive T cells, which express CD127 and undergo homeostatic proliferation. IL-7 administration increased the homeostatic proliferation of nonalloreactive T cells, but had no effect on alloreactive T cells and the development of graft-versus-host disease. Allogeneic transplant of purified hematopoietic stem cells and adoptive transfer of thymocytes into lethally irradiated hosts suggested that recent thymic emigrants can undergo homeostatic proliferation and acquire a memory-like phenotype. We found by BrdU pulse-chase, cell cycle, and annexin V analyses that IL-7 administration has significant proliferative and antiapoptotic effects on posttransplant peripheral T cells. We conclude that homeostatic expansion is important for T cell reconstitution after allogeneic BMT and involves both transferred mature T cells and recent thymic emigrants. Apart from its thymopoietic effects, IL-7 promotes peripheral T cell reconstitution through its selective proliferative and antiapoptotic effects on nonalloreactive and de novo-generated T cells, but has no effect on alloreactive T cells.