While it is generally believed that the avidity of the T cell antigen receptor (TCR) for self antigen/major histocompatibility complex (MHC) determines a thymocyte's fate, how the cell discriminates between a stimulus that causes positive selection (survival) and one that causes negative selection (death) is unknown. We have previously demonstrated that glucocorticoids are produced in the thymus, and that they antagonize deletion caused by TCR cross-linking. To examine the role of glucocorticoids during MHC-dependent selection, we examined thymocyte development in organ cultures in which corticosteroid biosynthesis was inhibited. Inhibition of glucocorticoid production in thymi from α/β-TCR transgenic mice resulted in the antigen- and MHC-specific loss of thymocytes that normally recognize self antigen/MHC with sufficient avidity to result in positive selection. Furthermore, inhibition of glucocorticoid production caused an increase in apoptosis only in CD⁺CD8⁺ thymocytes bearing transgenic TCRs that recognized self antigen/MHC. These results indicate that the balance of TCR and glucocorticoid receptor signaling influences the antigen-specific thymocyte development by allowing cells with low-to-moderate avidity for self antigen/MHC to survive.