Two main lineages of T cells develop in the thymus: those that express the alphabeta T-cell receptor (TCR) and those that express the gammadelta TCR. Whereas the development, selection, and peripheral localization of newly differentiated alphabeta T cells are understood in some detail, these processes are less well characterized in gammadelta T cells. This review describes research carried out in this laboratory and others, which addresses several key aspects of gammadelta T-cell development, including the decision of precursor cells to differentiate into the gammadelta versus alphabeta lineage, the ordered differentiation over the course of ontogeny of functional gammadelta T-cell subsets expressing distinct TCR structures, programming of ordered Vgamma gene rearrangement in the thymus, including a molecular switch that ensures appropriate Vgamma rearrangements at the appropriate stage of development, positive selection in the thymus of gammadelta T cells destined for the epidermis, and the acquisition by developing gammadelta T cells of cues that determine their correct localization in the periphery. This research suggests a coordination of molecularly programmed events and cellular selection, which enables specialization of the thymus for production of distinct T-cell subsets at different stages of development.