Type I interferons alpha and beta, naturally produced regulators of cell growth and differentiation, have been shown to inhibit IL-7-induced growth and survival of B cell precursors in vitro. After confirming an inhibitory effect on B lymphopoiesis in an ex vivo assay, we treated newborn mice with an active IFN-alpha2/alpha1 hybrid molecule to assess its potential for regulating B and T cell development in vivo. Bone marrow and splenic cellularity was greatly reduced in the IFN-alpha2/alpha1-treated mice, and B lineage cells were reduced by >80%. The bone marrow progenitor population of CD43+B220+HSA- cells was unaffected, but development of the CD19+ pro-B cells and their B lineage progeny was severely impaired. Correspondingly, IL-7-responsive cells in the bone marrow were virtually eliminated by the interferon treatment. Thymus cellularity was also reduced by >80% in the treated mice. Phenotypic analysis of the residual thymocytes indicated that the inhibitory effect was exerted during the pro-T cell stage in differentiation. In IFN-alpha/beta receptor-/- mice, T and B cell development were unaffected by the IFN-alpha2/alpha1 treatment. The data suggest that type I interferons can reversibly inhibit early T and B cell development by opposing the essential IL-7 response.