We hypothesize that early lymphoid commitment from primitive hematopoietic marrow progenitors is governed by signals from the marrow microenvironment leading to sequential induction of lineage-specific genes. Using expression of lymphoid genes as markers of differentiation, we characterize a highly purified population (> 99.8% by double sorting) of primary human CD34+Lin-DR- progenitors. This population was then used to evaluate the effects of supplemental cytokines (interleukin-2 [IL-2], IL-3, IL-7, c-kit ligand), FLT-3 ligand (FL), and stroma-derived factors on lymphoid differentiation in vitro. CD3ε, RAG-1, Ikaros, CD10, and TdT transcripts were detected in the starting CD34+Lin-DR-population. By contrast, CD3γ, CD3δ, CD3ζ and RAG-2 transcripts were not present in any samples tested. The presence of supplemental cytokines alone at culture initiation permitted stimulation of the expression of CD3ζ but not of CD3γ or CD3δ. However, when FL and stroma-derived factors were added to cytokines, CD3 gene expression was induced in all samples. The predominant CD3 transcripts induced by optimal culture conditions were alternatively spliced isoforms lacking transmembrane sequences (CD3δ and CD3γ) and portions of the intracellular and extracellular domains (CD3γ). The combination of cytokines, FL, and stromal factors also provided a potent stimulus for RAG-2 gene expression. These findings show that FL in combination with stroma-derived factors provide important signals to promote early events required for lymphoid differentiation.