One component of antigen receptor diversity shared by all gnathostomes characterized to date is mediated by a unique DNA polymerase, terminal deoxynucleotidyl transferase (TdT), which generates significant functional diversity during immunoglobulin and T-cell receptor rearrangement. To gain further insight into the evolutionary origin(s) of this unique enzyme and the immune system, a thymic cDNA clone encoding TdT was isolated from rainbow trout. The 2.3 kilobase (kb) full-length clone contained an open reading frame of 1506 base pairs with a deduced protein product of M(r) 57000. Sequence comparisons demonstrate that TdT has been highly conserved in both sequence (> 70% aa similarity, > 50 aa identity) and overall structure during the course of vertebrate evolution. An amino acid alignment of all known TdT sequences (chicken, Xenopus, mouse, human, cattle, and trout) reveals that some, but not all, structural motifs believed to be critical for TdT activity have been conserved. The TdT alignment, in conjunction with the recently solved crystal structure for rat beta-polymerase, supports the hypothesis that both may have evolved from a common ancestral repair gene. In addition, four PKC phosphorylation sites are conserved, and hence may be involved in TdT regulation. Because TdT contributes to the generation of junctional diversity in antigen receptors of immature lymphocytes, its expression serves as a developmental marker for the sites of teleost lymphopoiesis. Northern blot (2.3 kb message) analysis shows that TdT mRNA is highly expressed within the thymus and to a lesser extent in the pronephros. In addition, reverse transcriptase-polymerase chain reaction analysis detected transcipts of both RAGI and TdT in the thymus, pronephros, mesonephros, spleen, and intestine, but not within muscle, liver, or brain. Finally, TdT cDNA was amplified from embryos at 20 days post fertilization (pf), which correlates with the appearence of the thymus and pronephros anlage during trout ontogeny.