BACKGROUND: Alpha-dystroglycan (alpha-DG) is a cell surface receptor providing a molecular link between the extracellular matrix (ECM) and the actin-based cytoskeleton. During its biosynthesis, alpha-DG undergoes specific and unusual O-glycosylation crucial for its function as a high-affinity cellular receptor for ECM proteins. METHODOLOGY/PRINCIPAL FINDINGS: We report that expression of functionally glycosylated alpha-DG during thymic development is tightly regulated in developing T cells and largely confined to CD4(-)CD8(-) double negative (DN) thymocytes. Ablation of DG in T cells had no effect on proliferation, migration or effector function but did reduce the size of the thymus due to a significant loss in absolute numbers of thymocytes. While numbers of DN thymocytes appeared normal, a marked reduction in CD4(+)CD8(+) double positive (DP) thymocytes occurred. In the periphery mature naïve T cells deficient in DG showed both normal proliferation in response to allogeneic cells and normal migration, effector and memory T cell function when tested in acute infection of mice with either lymphocytic choriomeningitis virus (LCMV) or influenza virus. CONCLUSIONS/SIGNIFICANCE: Our study demonstrates that DG function is modulated by glycosylation during T cell development in vivo and that DG is essential for normal development and differentiation of T cells.