To determine whether signaling via CD122 (interleukin-2 [IL-2]/IL-15 receptor beta-chain) plays a role in regulating the expansion and differentiation of lymphocyte precursors, we have characterized its expression and evaluated its ability to influence the activity of developing lymphoid cells. A significant fraction of Sca1+Lin- hematopoietic stem cells in day 12 fetal liver were found to be CD122+. CD122-mRNA+ and IL-2-mRNA+ cells were also localized in embryo sections within pharyngeal blood vessels adjacent to and surrounding the thymic analgen. This distribution is consistent with the migration of CD122+ progenitor cells from the liver to the developing thymus where a majority of Sca1+ intrathymic T-cell progenitors were CD122+. Analysis of CD122 expression in the day 12 fetal liver revealed that the majority of B220+ cells were CD122+. Furthermore, CD122 expression was restricted to the earliest B220+ cells (CD43+CD24-; prepro B cells; fraction A) that proliferate vigorously to IL-2 in the absence of any stromal cells, but not to IL-15. Consistent with a role for the IL-2/IL- 2R pathway in lymphocyte development is the progressive loss of B cells seen in IL-2-deficient mice. Together, these observations suggest that CD122 plays a role in regulating normal lymphocyte development in vivo.