We have investigated whether in the human thymus transition of CD4+CD8+ double positive (DP) to CD4+ or CD8+ single positive (SP) cells is sufficient for generation of functional immunocompetent T cells. Using the capacity of thymocytes to expand in vitro in response to PHA and IL-2 as a criterion for functional maturity, we found that functional maturity of both SP and DP thymocytes correlates with downregulation of CD1a. CD1a- cells with a persistent DP phenotype were also found in neonatal cord blood, suggesting that at least a proportion of mature DP cells can emigrate from the thymus. The requirements for generating functional T cells were investigated in a hybrid human/mouse fetal thymic organ culture. MHC class II-positive, but not MHC class II-negative, mouse thymic microenvironments support differentiation of human progenitors into TCR alpha beta+CD4+ SP cells, indicating that mouse MHC class II can positively select TCR alpha beta +CD4+ SP human cells. Strikingly, these SP are arrested in the CD1a+ stage and could not be expanded in vitro with PHA and IL-2. CD1a+CD4+ SP thymocytes do not represent an end stage population because purified CD1a+CD4+ SP thymocytes differentiate to expandable CD1a- cells upon cocultivation with human thymic stromal cells. Taken together these data indicate that when CD1a+ DP TCR alpha beta low cells mature, these cells interact with MHC, but that an additional, apparently species-specific, signal is required for downregulation of CD1a to generate functional mature TCR alpha beta + cells.