Productive gene rearrangement at the T-cell receptor (TCR) beta-chain locus facilitates formation of the "pre-TCR," a molecular complex that is important for the subsequent development of alpha beta T cells. The transition of thymocytes from a population of cells undergoing TCRbeta chain genes to a population enriched in cells with productively rearranged TCRbeta chain genes is known as "beta selection." This is the first point in alpha beta T-cell development at which the products of an activated TCR locus define cell phenotype. Toward an understanding of these events, this study has focused on a set of thymocytes defined by cell surface phenotype as HSA+ CD44low CD25+, in which the bulk of TCRbeta gene rearrangement occurs. The analysis of this set, presented here, allows its novel subdivision into two subsets that are respectively strong candidates for cells immediately prior to and immediately following TCRbeta selection. Cells that have passed beta selection differ from the preceding cells by several criteria, including hyperphosphorylation of Rb, increased expression of cyclins A and B, down-regulation of p27, increased CDK2 activity, an induction of cdc2 activity, and progression through DNA synthesis. Consistent with these changes being attributable to productive TCRbeta chain gene rearrangement, the identified "beta-selected" subset is not detected in mutant mice that cannot assemble a pre-TCR. Interestingly, there is a coincident selective and transient down-regulation of the protein RAG2, on which TCR gene rearrangement obligatorily depends. Together, these findings demonstrate that productive TCR gene rearrangement is associated with events that can ensure thymocyte expansion and monoclonality.