Hassall's corpuscles-first described in the human thymus over 150 years ago-are groups of epithelial cells within the thymic medulla. The physical nature of these structures differs between mammalian species. Although Hassall's corpuscles have been proposed to act in both the removal of apoptotic thymocytes and the maturation of developing thymocytes within the thymus, the function of Hassall's corpuscles has remained an enigma. Here we report that human Hassall's corpuscles express thymic stromal lymphopoietin (TSLP). Human TSLP activates thymic CD11c-positive dendritic cells to express high levels of CD80 and CD86. These TSLP-conditioned dendritic cells are then able to induce the proliferation and differentiation of CD4(+)CD8(-)CD25(-) thymic T cells into CD4(+)CD25(+)FOXP3(+) (forkhead box P3) regulatory T cells. This induction depends on peptide-major histocompatibility complex class II interactions, and the presence of CD80 and CD86, as well as interleukin 2. Immunohistochemistry studies reveal that CD25(+)CTLA4(+) (cytotoxic T-lymphocyte-associated protein 4) regulatory T cells associate in the thymic medulla with activated or mature dendritic cells and TSLP-expressing Hassall's corpuscles. These findings suggest that Hassall's corpuscles have a critical role in dendritic-cell-mediated secondary positive selection of medium-to-high affinity self-reactive T cells, leading to the generation of CD4(+)CD25(+) regulatory T cells within the thymus.