Absent T lymphocytes were unexpectedly found in homozygotes of a transgenic mouse from an unrelated project. T cell development did not progress beyond double-negative stage 1 thymocytes, resulting in a hypocellular, vestigial thymus. B cells were present, but NK cell number and B cell isotype switching were reduced. Transplantation of wild-type hematopoietic cells corrected the defect, which was traced to a deletion involving five contiguous genes at the transgene insertion site on chromosome 12C3. Complementation using bacterial artificial chromosome transgenesis implicated zinc finger BTB-POZ domain protein 1 (Zbtb1) in the immunodeficiency, confirming its role in T cell development and suggesting involvement in B and NK cell differentiation. Targeted disruption of Zbtb1 recapitulated the T-B+NK-SCID phenotype of the original transgenic animal. Knockouts for Zbtb1 had expanded populations of bone marrow hematopoietic stem cells and also multipotent and early lymphoid lineages, suggesting a differentiation bottleneck for common lymphoid progenitors. Expression of mRNA encoding Zbtb1, a predicted transcription repressor, was greatest in hematopoietic stem cells, thymocytes, and pre-B cells, highlighting its essential role in lymphoid development.