The binding kinetics of the TCR for its interacting ligand and the nature of the resulting signal transduction event determine the fate of a developing thymocyte. The intracellular tyrosine phosphatase SHP-1 is a potential regulator of the TCR signal transduction cascade and may affect thymocyte development. To assess the role of SHP-1 in thymocyte development, we generated T cell-transgenic mice that express a putative dominant negative form of SHP-1, in which a critical cysteine is mutated to serine (SHP-1 C453S). SHP-1 C453S mice that express the 3. L2 TCR transgene are increased in CD4 single positive cells in the thymus and are increased in cells that express the clonotypic TCR. These data suggest that the expression of SHP-1 C453S results in increased positive selection in 3. L2 TCR-transgenic mice and support a role for SHP-1 thymocyte development.