The nature and lineage potential, particularly that for B cells, of thymus settling progenitors (TSP) in the adult mouse has been the subject of considerable debate. Lack of B cell potential would suggest pre-thymic, whereas its presence would suggest intra-thymic loss of B cell potential. Using limiting dilution analysis (LDA) in vitro and transfer experiments in vivo, we show that the B cell potential of TSP is critically dependent on mouse age, reaching a maximum of about 1 in 20 cells at birth, decreasing 50-fold in adult mice. Cells with a TSP phenotype can be found in the neonatal blood. Furthermore, using LDA, we show that Notch ligand signaling of TSP results in the loss of B cell potential with a half-life of approximately 12 h. Taken together, these results indicate that loss of B cell potential by TSP is an intra-thymic event and highlight the developmental pressure acting on the immune system to rapidly colonize primary lymphoid organs with functional progenitors. This critical time coincides with birth in the mouse. In the adult mouse, we estimate than only about 5 TSP cells/day would be required to maintain steady-state thymopoiesis.