The lymphopenia gene (lyp) on rat chromosome 4 is closely linked to autoimmune diabetes in the BioBreeding (BB) rat. Lyp controls the number of peripheral lymphocytes by reducing T cells of the RT6+ phenotype by almost 90%. Following nine cycle of marker-assisted cross-intercross breeding we have developed congenic lyp/lyp, lyp/+ and +/+ (wildtype) rats on the background of DR rats. Prediabetic and insulitis free lyp/lyp, lyp/+ and +/+ rats were used to determine the effect of lyp on cytokine expression in the thymus. In situ hybridization of thymus cryosections showed that the interferon gamma (IFN gamma) mRNA expression was highest in lyp/lyp rats and the hybridization signal was restricted to the medullary compartment. The frequency of IFN gamma and interleukin (IL)-10 mRNA expressing cells in isolated thymocytes determined by quantitative image analysis, demonstrated an increased IFN gamma: IL-10 ratio in thymocytes from lyp/lyp homozygotes compared to lyp/+ and +/+ rats. This confirmed a lyp gene dose-dependent segregation of the IFN gamma high phenotype. Recombinant human glutamic acid decarboxylase (GAD65) increased the number of IFN gamma and IL-10 mRNA expressing thymocytes after in vitro culture. We conclude that the quantitative ratio of cytokine producing thymocytes is associated with the lyp genotype. These potentially autoreactive thymocytes may explain the establishment of beta-cell directed autoimmunity in the BB rat despite peripheral lymphopenia.