Programmed death receptor 1 (PD-1) is expressed on thymocytes in addition to activated lymphocyte cells. Its ligation is thought to negatively regulate T cell activation, and PD-1−/− mice develop autoimmunity. To study the role of PD-1 on the development and function of a monoclonal CD8+ T cell population, 2C TCR-transgenic/recombination-activating gene 2−/−/PD-1−/− mice were generated. Unexpectedly,∼ 30% of peripheral T cells in these mice were CD4/CD8 double negative (DN). Although the DN cells were not activated by Ag-expressing APCs, they functioned normally in response to anti-CD3/anti-CD28. These cells had a naive surface phenotype and lacked expression of NK1. 1, B220, and γδ TCR; and the majority did not up-regulate CD8αα expression upon activation, arguing that they are not predominantly diverted γδ-lineage cells. The thymus was studied in detail to infer the mechanism of generation of DN peripheral T cells. Total thymus cellularity was reduced in 2C TCR-transgenic/recombination-activating gene 2−/−/PD-1−/− mice, and a relative increase in DN cells and decrease in double-positive (DP) cells were observed. Increased annexin V+ cells among the DP population argued for augmented negative selection in PD-1−/− mice. In addition, an increased fraction of the DN thymocytes was HSA negative, suggesting that they had undergone positive selection. This possibility was supported by decreased emergence of DN PD-1−/− 2C cells in H-2 k bone marrow chimera recipients. Our results are consistent with a model in which absence of PD-1 leads to greater negative selection of strongly interacting DP cells as well as increased emergence of DN αβ peripheral T cells.