Current data indicate that CD5 functions as an inhibitor of TCR signal transduction. Consistent with this role, thymocyte selection in TCR transgenic/CD5(-/-) mice is altered in a manner suggestive of enhanced TCR signaling. However, the impact of CD5 deletion on thymocyte selection varies depending on the transgenic TCR analyzed, ranging from a slight to a marked shift from positive toward negative selection. An explanation for the variable effect of CD5 on selection is suggested by the observation that CD5 surface expression is regulated by TCR signal intensity during development and CD5 surface levels on mature thymocytes and T cells parallel the avidity of the positively selecting TCR/MHC/ligand interaction. In this study, we generated mice that overexpress CD5 during thymocyte development (CD5-tg), and then examined the effect of CD5 overexpression or CD5 deletion (CD5(-/-)) on selection of thymocytes that express the same TCR transgenes. The results demonstrate that the effect on thymocyte selection of altering CD5 expression depends on the avidity of the selecting interaction and, consequently, the level of basal (endogenous) CD5 surface expression. Substitution of endogenous CD5 with a transgene encoding a truncated form of the protein failed to rescue the CD5(-/-) phenotype, demonstrating that the cytoplasmic domain of CD5 is required for its inhibitory function. Together, these results indicate that inducible regulation of CD5 surface expression during thymocyte selection functions to fine tune the TCR signaling response.