Corticosteroids affect the development of fetal foregut-derived organs in which epithelial-mesenchymal interactions are associated with the developmental process. The thymus is one such organ and is profoundly sensitive to corticosteroids when mature. In this study corticosterone (CS) effects on fetal thymocyte development were investigated using a fetal thymus organ culture system which allows the growth, differentiation, and function of developing thymocytes to be monitored in vitro. CS inhibited, but did not block growth of fetal thymocytes, although the appearance of mature thymocytes was inhibited, similar to previously reported effects of interleukin 2 (IL2). CS enhanced the proportion of Mac1+, Ia+ and FcR+ cells and maintained high levels of IL2 receptor (IL2R) positive immature cells. Functional cytotoxic cells were detected in CS-treated organ cultures which expressed a Thy 1-, CD8- phenotype, atypical for thymus derived killer cells. While this cytotoxicity may be stimulated by CS, it could simply be due to a relative depletion of the main pool of thymocytes. These cytotoxic cells may have a role in directing apoptotic mechanisms occurring during thymocyte development.