The mechanism by which exposure to 2,3,7,8-tetrachlorodibenzo-p-dioxin (TCDD) produces thymic atrophy and cell-mediated immune suppression in experimental animals is poorly understood. A previous study from our laboratory found that terminal deoxynucleotidyl transferase-synthesizing lymphocyte stem cell populations in fetal liver and neonatal bone marrow, but not thymus, were profoundly altered after perinatal TCDD exposure, implying that a defect in the prothymocyte population in liver and marrow may play a role in the etiology of thymic atrophy in TCDD-exposed animals. In this report, we present results of experiments designed to directly assess the prothymocyte compartment in mice exposed to TCDD perinatally by examining the ability of these stem cells to reconstitute an irradiated thymus. Maternal TCDD exposure (15 micrograms/kg) caused a significant impairment of both fetal liver and neonatal bone marrow prothymocyte activity. These alterations occurred at tissue concentrations less than 200 fg of TCDD per mg. TCDD treatment also resulted in a mild reduction in colony-forming unit-spleen in these organs and a decrease in colony-forming unit-granulocyte-macrophage in fetal and neonatal liver, but not bone marrow. Overall, these data provide evidence that alterations to early stages of T-lymphopoiesis, at the level of the prothymocyte, may be involved in the development of TCDD-induced thymic atrophy and cell-mediated immunosuppression.