Ly alloantigens coded by two unlinked genetic loci (Ly-1 and Ly-2/Ly-3) are expressed on lymphoid cells undergoing thymus-dependent differentiation. Peripheral Thy-1+ cells from C57BL/6 mice can be divided into three subclasses on the basis of differential expression of Ly-1, Ly-2, and Ly-3; about 50% express all three Ly antigens (Ly -123+), about 33% only Ly-1 (Ly-1+), and about 6-8% Ly-2 and Ly-3 (Ly-23+). Cells of the Ly-123+ subclasses are the first peripheral Thy-1+ cells to appear in ontogeny, and are reduced in the periphery shortly after adult thymectomy. In contrast, Ly-1+ and Ly-23+ subclasses appear later in the peripheral tissues than do Ly-123+ cells, and are resistant to the early effects of adult thymectomymperiheral lymphoid populations depleted of Ly-1+ cells and Ly-123+ cells (and thereby enriched for Ly-23+ cells) were incapable of developing significant helper activity to SRBC but generated substantial levels of cytotoxic activity to allogeneic target cells. The same lymphoid populations, depleted of Ly-23+ cells and Ly-123+ cells (and thereby enriched for Ly-1+ cells), produced substantial helper responses but were unable to generate appreciable levels of killer activity. These experiments imply that commitment of T cells to participate exclusively in either helper or cytotoxic function is a differentiative process that takes place before they encounter antigen, and is accompanied by exclusion of different Ly groups, Lu-23 or Ly-1 respectively, from TL+Ly-123+ T-cell precursors. It is yet to be decided whether the TL-phase by Ly-123+ subclass is a transitional form or a separately differentiated subclass with a discrete immunologic function.