Little is known about the molecular mechanisms and transcriptional regulation that govern T cell selection processes and the differentiation of CD4+ and CD8+ T cells. Mice lacking the interferon regulatory transcription factor-1 (IRF-1) have reduced numbers of mature CD8+ cells within the thymus and peripheral lymphatic organs. Here we show that positive and negative T cell selection of two MHC class I-restricted TCR alphabeta transgenes, H-Y and P14, are impaired in IRF-1-/- mice. The absence of IRF-1 resulted in decreased expression of LMP2, TAP1, and MHC class I on thymic stromal cells. Despite decreased MHC class I expression on IRF-1-/- thymic stromal cells, the defect in CD8+ T cells development did not reside in the thymic environment, and IRF-1-/- stromal cells can fully support development of CD8+ thymocytes in in vivo bone marrow chimeras and in vitro reaggregation cultures. Moreover, IRF-1-/- thymocytes displayed impaired TCR-mediated signal transduction, and the induction of negative selection in TCR Tg thymocytes from IRF-1-/- mice required a 1000-fold increase in selecting peptide. We also provide evidence that IRF-1 is mainly expressed in mature, but not immature, thymocytes and that expression of IRF-1 in immature thymocytes is induced after peptide-specific TCR activation. These results indicate that IRF-1 regulates gene expression in developing thymocytes required for lineage commitment and selection of CD8+ thymocytes.