Human CD34+ CD38− hematopoietic precursor cells from fetal liver are able to develop into T, NK, and dendritic cells in a hybrid human/mouse fetal thymic organ culture (FTOC). In this report, we pay particular attention to the early events in differentiation of these precursor cells. We show that the CD34+ CD38− precursor cells, which are CD4− CD7− cyCD3− HLA-DR−/++(cy, cytoplasmatic), differentiate into a CD4+ population that remained CD7− cyCD3− HLA-DR++ and a CD4− population that expressed CD7 and cyCD3. The CD4+ CD7− cyCD3− cells differentiate into phenotypically and functionally mature dendritic cells, but do not differentiate into T or NK cells. The CD4− CD7+ cyCD3+ population later differentiates into a CD4+ CD7+ cyCD3+ HLA-DR− population, which has no potential to differentiate into dendritic cells but is able to differentiate into NK cells and γδ and αβ T lymphocytes. These findings support the notion that the T/NK split occurs downstream of the NK/dendritic split.