The presence of intestinal intra-epithelial lymphocytes (IEL) has been appreciated for over 100 years. However, until recently, the IEL were thought to be simply another specialized component of the gut-associated lymphoid tissue (GALT), sharing the same origin as lymphocytes found in other GALT compartments such as the lamina propria, the Peyer's patches, and the mesenteric lymph nodes. While the IEL remain functionally enigmatic, over the last ten years increasing evidence, originally based on the phenotypic complexity of IEL, has led to the conclusion that the intestinal epithelium comprises a distinct and unique lymphoid compartment within the organism. The recent discovery that the intestinal epithelium is a primary T lymphopoietic organ provides obvious potential explanations for the phenotypic peculiarities of IEL. The following discussion reviews the experiments that established that the intestinal epithelium is a site of T cell development and selection, and the discussion correlates phenotypic and functional heterogeneity of IEL within this context.