The distribution and localization of thymocytes positive for p21 ras, the lymphocyte homing receptor antigen MEL-14, and IL-2 receptors were studied by immunohistology and flow cytometry. Comparisons were made between age-matched normal mice, carcinogen-treated mice at early (stage II) and late (stage III) stages of disease, and cortisone-treated mice. In normal thymus, the majority of cortical and medullary thymocytes are p21 ras positive. MEL-14hi- and IL-2R-positive cells are located in the cortex and comprise less than 5% of the thymus population. Stage II carcinogen-treated animals consistently show increased numbers of MEL-14hi cells in the thymus, with fewer animals having increased numbers of IL-2R positive cells. These populations appear to be different from one another. All stage III animals have MEL-14hi-positive tumor cells, which in 70% of the cases also express IL-2R. Cortisone treatment was used to study non-malignant proliferation. After cortisone treatment there is a marked increase of p21 ras staining in both the cortex and medulla during the first 72-hour interval. Within 24 hours, 50% of the thymocytes are IL-2R positive, but MEL-14hi cells are not detected. By 48 hours, 90% of the thymus population expresses IL-2R and 50% of the cells are MEL-14hi positive, and this results in a substantial population of cells positive for both IL-2R positive:MEL-14hi markers. This population rapidly disappears by 72 hours, leaving 90% of the cells MEL-14hi positive and less than 10% IL-2R positive. The staining of p21 ras at 72 hours is unusual, showing a speckled, cytoplasmic pattern. In light of our findings, we propose that the first step in thymic lymphomagenesis in carcinogen-treated C57BL/6 mice involves the rare cortical MEL-14hi subpopulation and is thymic dependent. A late stage involves expression of IL-2 receptors by a subset of MEL-14hi cells, thus conferring the potential for autonomous growth and malignancy.