SOCS1 is an SH2-containing protein that is primarily expressed in thymocytes in a cytokine- and T cell receptor–independent manner. SOCS1 deletion causes perinatal lethality with death by 2–3 weeks. During this period thymic changes include a loss of cellularity and a switch from predominantly CD4⁺CD8⁺ to single positive cells. Peripheral T cells express activation antigens and proliferate to IL-2 in the absence of anti-CD3. In addition, IFNγ is present in the serum. Reconstitution of the lymphoid lineage of JAK3-deficient mice with SOCS1-deficient stem cells recapitulates the lethality and T cell alterations. Introducing a RAG2 or IFNγ deficiency eliminates lethality. The results demonstrate that lymphocytes are critical to SOCS1-associated perinatal lethality and implicate SOCS1 in lymphocyte differentiation or regulation.