Fc epsilon RI gamma (gamma) is a member of a group of related proteins (the zeta-family dimers) that function as signal-transducing components of both Fc receptors and the T cell antigen receptor (TCR). Analysis of gamma expression during fetal thymus ontogeny revealed that it is expressed in early thymocytes, before the initiation of clonotypic TCR-alpha and TCR-beta gene rearrangement but is down-regulated in most adult thymocytes. To explore a possible role for gamma in thymocyte development, we generated transgenic mice in which this protein was overexpressed at all stages of ontogeny. Overexpression of gamma inhibited the maturation of T cells as well as natural killer (NK) cells. The developmental effects were transgene dose related and correlated with markedly delayed maturation of fetal CD4-CD8- FcRII/III+ thymocytes, cells thought to include the progenitors of both T and NK cells. These results suggest that the zeta and gamma chains serve distinctive functions in thymocyte development and indicate that Fc receptor(s) may play an important role in regulating the differentiation of early progenitor cells within the thymus.