Individuals with cartilage-hair hypoplasia (CHH), an autosomal recessive form of short-limbed dwarfism, have markedly reduced lymphocyte proliferative responses and cutaneous delayed hypersensitivity reactions, but normal humoral immunity. In the present study we investigated the cellular basis of the immunodeficiency in CHH. Defective lymphocyte proliferation could be due to a) an imbalance of immunoregulatory lymphocyte subpopulations, b) defective accessory cell function, or c) an intrinsic cellular defect in lymphocytes from CHH individuals. The absolute numbers of B cells and immunoregulatory (OKT4+, OKT8+) T cells were markedly diminished, but the proportions of these populations were the same as in the normal controls. OKM1+ lymphocytes were increased in proportion, and OKM1+ macrophages had normal adherence, helper, and phagocytic properties. Co-culture experiments failed to reveal any evidence of suppression by CHH mononuclear cells. CHH lymphocytes could not be stimulated to proliferate normally with B and T cell activators, mitogenic monoclonal antibody (OKT3), allogeneic cells, or chemical activators (Ca++ ionophore A23187 and phorbol myristate acetate). Fibroblasts from three CHH individuals also proliferated at a significantly decreased rate, compared to two normal lines. These results demonstrate a selective loss of B and T lymphocytes in CHH, as well as an intrinsic proliferative defect in CHH lymphocytes distal to the initial events in the lymphocyte activation sequence. These findings in CHH fibroblasts and lymphocytes may reflect a generalized defect present in multiple cell types in CHH.