There is increasing evidence that human hematopoietic stem cells can develop into lymphocytes expressing T cell surface markers in the organ culture of murine embryonic thymic lobes. If human T cells with functional maturity are inducible from human stem cells in the mouse, it may be a useful model to investigate human T cell development and the human immune response in vivo. To approach this, we produced a hybrid cluster of murine fetal thymic epithelial cells and human cord blood-derived CD34(+) cells (hu/m cluster) using reaggregate thymic organ culture, and subsequently implanted it under the kidney capsule of NOD/SCID mice. The implanted hu/m cluster grew in volume under the kidney capsule and contained increased numbers of CD4(+)CD8(+)cells as well as CD4 or CD8 single-positive cells with low CD1a expression. These lymphocytes were also shown to possess activity for producing IL-2 and IL-4. Characteristics similar to human T cells also developed in the thymus of newly established mice lacking NK activity from NOD/SCID mice. These results indicate that functionally mature T cells can develop in vivo from human hematopoietic progenitors in the murine environment composed of thymic epithelial cells.