Recent data suggest that survival of resting, naïve T cells requires an interaction with self MHC molecules. From analysis of the class I MHC-restricted T cell receptor transgenic strain OT-I, we report a different response. Rather than merely surviving, these T cells proliferated slowly after transfer into T-depleted syngeneic hosts. This expansion required both T cell “space” and expression of normal levels of self class I MHC molecules. Furthermore, we demonstrate that during homeostatic expansion in a suitable environment, naïve phenotype (CD44^low) OT-I T cells converted to memory phenotype (CD44^med/high), despite the absence of foreign antigenic stimulation. On the other hand, cells undergoing homeostatic expansion did not acquire cytolytic effector function. The significance of these data for reactivity of T cells with self peptide/MHC ligands and the implications for normal and abnormal T cell homeostasis are discussed.