Medullary thymic epithelial cells (mTECs) serve an essential function in central tolerance by expressing peripheral-tissue antigens. These antigens may be transferred to and presented by dendritic cells (DCs). Therefore, it is unclear whether mTECs, in addition to being an antigen reservoir, also serve a mandatory function as antigen-presenting cells. Here we diminished major histocompatibility complex (MHC) class II on mTECs through transgenic expression of a 'designer' microRNA specific for the MHC class II transactivator CIITA (called 'C2TA' here). This resulted in an enlarged polyclonal CD4(+) single-positive compartment and, among thymocytes specific for model antigens expressed in mTECs, enhanced selection of regulatory T cells (T(reg) cells) at the expense of deletion. Our data document an autonomous contribution of mTECs to both dominant and recessive mechanisms of CD4(+) T cell tolerance and support an avidity model of T(reg) cell development versus deletion.