Castration of normal male rodents results in significant enlargement of the thymus, and androgen replacement reverses these changes. Androgen-resistant testicular feminization (Tfm) mice also show significant thymus enlargement, which suggests that these changes are mediated by the androgen receptor (AR). The cellular targets of androgen action in the thymus are not known, but may include the lymphoid cells (thymocytes) as well as nonlymphoid epithelial cells, both of which have been believed to express AR. In the present study immunohistochemical analysis and hormone binding assays were used to demonstrate the presence of AR in thymic epithelial cells. The physiological significance of this epithelial cell AR expression was defined by further studies performed in vivo using chimeric mice, produced by bone marrow transplantation, in which AR expression was limited to either lymphoid or epithelial components of the thymus. Chimeric C57 mice engrafted with Tfm bone marrow cells (AR⁺ epithelium and AR⁻ thymocytes) had thymuses of normal size and showed the normal involutional response to androgens, whereas chimeric Tfm mice engrafted with C57 bone marrow cells (AR⁻ epithelium and AR⁺ thymocytes) showed thymus enlargement and androgen insensitivity. Furthermore, phenotypic analyses of lymphocytes in mice with AR⁻ thymic epithelium showed abrogation of the normal responses to androgens. These data suggest that AR expressed by thymic epithelium are important modulators of thymocyte development.