Transgenic mice that expressed a transplantation antigen, H-2Kb, in an unusual tissue distribution have been developed. Gene-regulatory elements from the immunoglobulin heavy-chain locus (Emu enhancer and heavy chain promoter) were linked to the class I Kb gene and the construct microinjected into fertilized mouse eggs of a different haplotype. It was expected that such gene-regulatory elements would direct expression of the foreign class I molecules only to B and T lymphocytes. However, expression was also detected in a subset of thymus medullary epithelium. The Kb molecules expressed on this thymic subset were unable to positively select T cells for passage to the periphery. The mice were, however, tolerant of the cell types expressing the foreign Kb molecules and were also tolerant of Kb presented as skin grafts. These results suggest that not all components of thymic epithelium are involved in positive selection of T cells and that transplantation antigens expressed on non-dendritic cells can induce tolerance.