Lymphoid cell development is an ordered process that begins in the embryo in specific sites and progresses through multiple differentiative steps to production of T- and B- cells. Lymphoid cell production is marked by the rearrangement process, which gives rise to mature cells expressing antigen-specific T-cell receptors (TCR) and immunoglobulins (Ig). While most transcripts arising from TCR or Ig loci reflect fully rearranged genes, germline transcripts have been identified, but these have always been thought to have no specific purpose. Germline transcription from either unrearranged TCR or unrearranged Ig loci was commonly associated with an open chromatin configuration during VDJ recombination. Since only early T and B cells undergo rearrangement, the association of germline transcription with the rearrangement process has served as an appropriate explanation for expression of these transcripts in early T- and B-cell progenitors. However, germline TCR-V beta 8.2 transcripts have now been identified in cells from RAG(-/-) mice, in the absence of the VDJ rearrangement event and recombinase activity. Recent data now suggest that germline TCR-V beta transcription is a developmentally regulated lymphoid cell phenomenon. Germline transcripts could also encode a protein that plays a functional role during lymphoid cell development. In the least, germline transcripts serve as markers of early lymphoid progenitors.